AGRICULTURAL POLICY ANALYSIS
IN SUB-SAHARAN AFRICA
MAX R. LANGHAM AND FRANCOIS KAMAJOU
PROCEEDINGS OF AN
AGRICULTURAL POLICY ANALYSIS
IN SUB-SAHARAN AFRICA
MAX R. LANGHAM and FRANCOIS KAMAJOU
PROCEEDINGS OF AN INTERNATIONAL SYMPOSIUM
Agicultural Education Project/USAID/Cameroon
Cameroon Agricultural Policy and Planning
November 4-6, 1991
University Center of Dschang
Langham, Max R., and Francois Kamajou, eds. Agricultural Policy
Analysis in Sub-Saharan Africa. Proceedings of an
International Symposium, November 4-6, 1991. Jointly
presented by the University Center of Dschang and the
University of Florida under the auspices of the Agricultural
Education Project and Cameroon Agricultural Policy and
Planning Project/USAID/Cameroon, Dschang, Cameroon, 1992.
Direct inquires to the Office of International Programs, P.O. Box
110320, Gainesville FL 32611-0320.
Copyright 0 1992, University of Florida
This symposium was held in recognition of the need for well-
reasoned economic analyses to support the policy-making processes.
Its objective was to provide an independent forum for analysts to
exchange ideas and results from their work.
The symposium was based on prepared papers in areas of
agricultural policy analysis of particular interest to Sub-Saharan
Africa. Each session of the workshop consisted of two or three
papers with a discussant for most papers1. Each official invitee
participated as a presenter, discussant, or sessional chair.2
Drafts of papers were circulated to official invitees upon arrival.
Sessions were held in English or French with choice left to the
presenters with simultaneous translation into the other language.
The papers were published in the language chosen by the authors)
and are offered in this volume as a contribution to African
literature on agricultural policy analysis.
The Symposium benefitted from the input of many. We
particularly acknowledge Dr. Peter A. Hartmann, Chief of Party,
Agricultural Education Project (AEP), and Dr. Peter W. Wyeth, Chief
of Party, Cameroon Agricultural Policy and Planning Project (CAPP)
for arranging the needed funding through their projects. Both AEP
and CAPP are joint projects between the U.S. Agency for
International Development (USAID) Mission in Yaounde, Cameroon, and
the Government of Cameroon. The AEP is jointly conducted by the
University of Florida, Florida A&M University and the University
Center of Dschang. The CAPP is jointly conducted by the Consortium
for International Development, administered from Washington State
University, and the Ministry of Agriculture, the Ministry of
Livestock, and the Ministry of Planning within the Government of
Cameroon. USAID Missions in some other African countries also
helped with travel expenses of participants from their respective
countries and we are grateful to them. Finally, we acknowledge the
enthusiastic support of other members of the Organizing Committee
(see Appendix III) for helping with the logistics.
Max R. Langham
University of Florida
Gainesville, Florida, USA
University Center of Dschang,
'See Appendix I for an overview of the program and its
2See Appendix II for a listing of the participants and their
Senior Divisional Officer of Menoua, Distinguished Scholars,
Honorable Invitees, Faculty, Ladies and Gentlemen, on behalf of our
government and of the University Center of Dschang, I welcome you
most cordially to this very special ceremony of our 1991/92
academic year. We are grateful to all who have come to participate
in this important joint academic activity.
This occasion is indeed unique. At the request of the faculty
of the Department of Agricultural Economics, the University is
inaugurating THE FOTZO TAGNE MEMORIAL LECTURE SERIES IN
AGRICULTURAL ECONOMICS in honor of the late Dr. Fotzo Tagne Pascal
in recognition of his contribution and his dedication to the
betterment of the University and his department.
Dr. FOTZO was born on May 15, 1951, in Foumban, West Province,
Cameroon. He completed his secondary education successively in
College St. Paul of Bafang( 1963-1966), College Ste Jeanne d'Arc of
Nkongsamba(1966-1969) and College Libermann of Douala (1969-1970)
from where he graduated with a baccalaureate in sciences.
His University training started at the University of Yaounde
in 1970 where after two years with a very brilliant academic
performance, he was admitted into the National Advanced School of
Agronomy (ENSA) in Yaounde. After two years at ENSA, he was
awarded the degree of Ingdnieur Agronome.
Owing to his outstanding performance, Fotzo Tagne was hired as
an instructor in the Department of Agricultural Economics at ENSA
in 1974. In 1975 he obtained a fellowship from the Ford Foundation
and enrolled for graduate studies at the University of Ibadan,
Nigeria, where upon another brilliant performance he graduated in
1977 with a Master of Philosophy in Agricultural Economics. His
performance at the University of Ibadan earned him another Ford
Foundation fellowship for doctoral studies at Michigan State
University, East Lansing, Michigan (USA). Fotzo Tagne enrolled at
Michigan State University in 1978 under the supervision of Carl
Eicher and was awarded the Doctor of Philosophy degree in
Agricultural Economics in 1982.
Dr. Fotzo worked two years for the West African Rice
Development Association (WARDA) in Bouake, C6te d'Ivoire before
returning to the Department of Agricultural Economics at the
University Center of Dschang in 1985. In 1986, he was appointed
Head of the Department. Dr. Fotzo authored a number of papers and
articles and was a consultant to the West African Farming System
Research Network (WAFSRN), the Farming System Support Project
IDirector General, University Center of Dschang, Dschang,
(FSSP) at the University of Florida and to the International
Development and Research Center (IDRC) in Canada. He was also
Chief Editor of the West African Journal of Agricultural Economics
and coordinator of the Bafou Research and Development Project at
the University Center of Dschang.
In 1986, Dr. Fotzo Tagne was awarded a prestigious fellowship
from the Kellogg Foundation International Fellows Program for
presenting a very pertinent research project on the economics of
rice in Cameroon. He was on his way to Rio de Janeiro in Brazil
for a methodological workshop for his Kellogg fellowship when he
was killed in a plane crash in January 1987.
It is our conviction that Dr. Fotzo Tagne's commitment to
academic excellence during his time with us provides a model for us
to emulate and remember. It is for his highly positive
contribution to our community that we at the University Center of
Dschang dedicate our first formal Lecture Series in his memory. It
is also appropriate that we recognize the personal commitment and
dedication of Prof. Kamajou Francois, Head, Department of
Agricultural Economics, for the concept of this Lecture Series and
for his efforts in its initiation here today. And, we recognize
and congratulate the faculty of the Department of Agricultural
Economics for their efforts and success in this endeavor. Finally,
we recognize the spontaneous and significant financial contribution
of the Kellogg Foundation International Fellows Program. This
organization, based at Michigan State University, made the first
donation in the amount of $15,000 and a subsequent donation of
$2500 to the Fotzo Tagne Memorial Lecture Series Endowment Fund and
we are very appreciative for this assistance.
All institutions of higher learning strive not only to
transfer existing knowledge but also to add to and improve the
existing knowledge base. The processes of creating new knowledge
require a high level of interaction, confrontation and exchange of
ideas among scholars. The Lecture Series which intends to bring to
this campus internationally and nationally recognized scholars of
high caliber is for us one of the ways to meet this obligation.
These distinguished scholars in addition to their lectures, will,
it is our cherish hope, interact with our faculty and students and
by so doing, share with us their expertise and their experience in
the complex, rapidly changing and challenging world of academics.
It is also our hope that during their stay on our campus, our
distinguished guest lecturers as well as all the other scholars,
will gain new experiences and return home with new academic
challenges. Let me conclude the dedication of this lecture series
by appealing to those here and to the other scholars and friends
who could not make it to this dedication to support this initiative
so as to make it a sustainable one.
The second part of our joint event is the International
Symposium on Agricultural Policy Analysis in Sub-Saharan Africa. To
all of you who had accepted papers and to those of you who were
selected as discussants or as sessional chairs, I extend my warm
Economics, we are taught, is the science of how best to
use scarce natural and human resources so as to satisfy the various
and competing individual and societal needs now and in the future.
The people of an economic system must continually struggle in their
development efforts and policies with many complex issues to their
own well being as well a that of future generations. Included are
issues of how to invest new capital and what institutional and
political changes are needed to keep pace with new realities. In
a dynamic and competitive world like ours, decisions on research,
education and training, development projects and programs,
production technologies and merchandizing techniques have become
Today, the people of Sub-Saharan Africa face acute economic
and social problems. In nearly all countries of the region,
productivity growth rates in agriculture which were relatively
satisfactory in the sixties and the first half of the seventies,
have fallen short of expectation and below the population growth
rates. Most of the problems rest, it is believed, on the
inadequacy or the failure of agricultural policies followed by
these countries. Rent seeking by government organizations and
other institutional employees, rather than service to the taxpayers
and other citizens have become the norms. Whether the structural
adjustment programs and privatization will be successful lies on
the good will of both the decision-makers and the implementers.
What is absolutely certain is that exogenous assistance is
progressively declining and the major development efforts for this
region will have to be endogenously driven.
A sound and reliable policy-making process rests on a
solid base of economic analysis. Economic analysis, much like the
processes it serves, needs to be abreast of the state-of-the-arts.
To assure that the information provided by economic analysis is as
objective as possible, the analysts have to be supported with human
capital investment which allows them to keep up with developments
in economic ideas and research methods. Furthermore, an objective
information system that feeds the policy-making processes must be
independent of these processes.
This symposium offers such an independent forum for analysts
like you to exchange ideas and results from your work. We believe
that objective criticism is the mother of sustainable progress and
I am convinced that your analyses and discussions will go beyond
pure academic exercises to tackle the real problems which have
plagued the economies and more specifically, the agricultural
sectors of the Sub-Saharan countries.
Once again, I congratulate the Department of Agricultural
Economics for this very timely initiative. Permit me to recognize
the special contribution of Max Langham, academic adviser in this
department, who in close collaboration with his colleagues
developed this symposium. We owe this symposium to his experience
and personal commitment. The contribution of the Agricultural
Education Project at the University Center of Dschang and of the
Cameroon Agricultural Policy and Planning project at the USAID
mission in Yaounde deserve a very special mention for their
financial support of this effort. To all those contributors, I
would like to express the deep appreciation and gratitude of the
Cameroon government and of our University Center. I wish you all
very fruitful discussions and an enjoyable stay on our campus and
in the town of Dschang.
Max R. Langham and Frangois Kamajou
Opening Welcome iii
INAUGURAL FOTZO TAGNE MEMORIAL LECTURE
1. The Role of a Scientist in Economic Development 3
AGRICULTURAL POLICY ANALYSIS FOR THE 1990s
2. Structural Adjustment in Cameroon and Implications
for Agriculture 11
3. Towards a Sustained Development of the Food and
Agriculture Sector of the UDEAC Member Countries 23
Wilfred A. Ndongko
Joseph N. Sama
4. Policy Choices for African Agriculture:
An Alternative Framework 41
5. Determinants of Productivity in the
Agricultural Sector with Implications
for Research Policy and Analysis 67
Max R. Langham
6. Agricultural Research Policy in Cameroon:
Implications of Economic Crisis and
Structural Adjustment 93
Doyle Baker and Jacob Ayuk-Takem
7. On-Farm Adaptive Research in Strong and Weak
National Agricultural Research Systems
in Sub-Saharan Africa: Policy Issues 109
8. The Effect of Cameroon Land Law on Agricultural
Frangois Tchala Abina
9. Fuelwood Demand and Supply, Deforestation and
Agricultural Development in West Africa:
Problems and Prospects 141
10. Farmer-Grazier Conflicts in the North West
Province of Cameroon: Implications for Policy
and Research 163
Camilla Harshbarger and Ajaga Nji
11. The Price Scissors and Free Rider Problem in
Cameroon Agricultural Policy 171
Aloysius Ajab Amin
Peter W. Wyeth
12. Price Policy in the Cameroonian Coffee Sub-Sector
with Emphasis on Arabica: Producers' Returns Versus
Government Revenues 189
Max R. Langham and Frangois Kamajou
13. Price Elasticity of Supply and Expenditure
Elasticity of Demand of Principal Agricultural
Commodities in Rwanda 211
James S. Ansoanuur
INSTITUTIONS AND TRADE POLICY
14. Cameroon's Bureaucracy and Its Effects on
Policy Formulation and Implementation 239
Nkwain Sama Joseph
15. The Impact of Imports Taxation on Local
Meat Production and Consumption 257
16. Note sur la liberalisation du marched
interieur du riz en C6te d'Ivoire 275
Maferima Diasassouba Toure
Therese Fouda Moulende
17. L'Union Centrale des Cooperatives Agricoles
de l'Ouest du Cameroun (UCCAO): de l'enterprise
commercial & l'organisation paysanne 293
G. Courade, P. Eloundou-Enyegue, et I. Grangeret
18. Identification de l'intervention de 1'Etat
pour une protection de la production interieure
des activities agro-industrielles centre les
distortions du marched mondial: cas de
l'huile de palme 311
Bernadette Kamgnia, Emmanuel Fandio, et
Jean-Claude Moger Ayem
19. Transaction Costs in the Coffee Sub-Sector and
Distortions in Resource Allocation 333
Max R. Langham and Joseph M. Ayissi
20. Measures of Transaction Costs in the Arabica
Coffee Subsector in Menoua Division of West
Province, Cameroon 359
Max R. Langham and Joseph M. Ayissi
LIVESTOCK SECTOR POLICY
21. Contribution & l'l6aboration de la politique
alimentaire du Cameroun: le cas des viandes 371
22. The Synthesis of the Nigerian Livestock Policy:
The Case of the Plateau State 401
G.B. Ayoola, J.A. Ayoade, and J.E. Goshit
23. Conference Summary 411
Lawrence W. Libby
24. Where Do We Go from Here? 417
APPENDIX I: Program 421
APPENDIX II: Authors and Participants 426
APPENDIX III: Organizing Committee
INTRODUCTION OF DR. UMA LELE, INAUGURAL LECTURER FOR THE
FOTZO TAGNE MEMORIAL LECTURE SERIES IN AGRICULTURAL ECONOMICS
Mr. Director General of the University Center of Dschang,
Senior Divisional Officer of Menoua, The Mayor of the Dschang Urban
Council, Faculty Members, Distinguished Scholars and Guests,
Friends, Ladies and Gentlemen, I have the pleasant responsibility
of introducing Dr. Uma Lele, our inaugural Fotzo Lecturer. Though
born in India, Dr. Lele is perhaps more identified with Africa and
The World Bank where she has and is still working on development
problems in many parts of the world. Dr. Lele's achievement in
development and in academics is indeed impressive.
After graduating from the University of Poona in India she
earned a Master and a Ph.D. at Cornell University in 1963 and 1965,
respectively. Upon graduation from Cornell University, she held
teaching positions at the Queens University, in Kingston, Ontario,
Canada. Between 1971 and 1989, she held various positions in The
World Bank in Washington D.C. including: Economist, Development
Economics Department, Development policy Staff, 1971-1974; Senior
Economist, Projects Department, Eastern Africa Region, 1975-1978;
Deputy Chief, Southern Agriculture Division, East Africa Region,
1978-1982; Senior Economist, Indonesia Countries Division, East
Asia Region, 1982-1983; Chief, Development Strategy Division,
Economic Research Staff, 1983-1987; Chief, Special Studies
Division, Policy, Planning & Research, 1987-1989. In July 1989,
Dr. Lele was appointed Manager of the very important Office of
Agricultural Policy, Technical Department, Africa Region where she
directed the World Bank Paper Series on Managing Agricultural
Development in Africa" (MADIA). There were 21 publications in this
series--14 in English and 7 in French.
Since January 1991, Dr. Lele has been on leave from The World
Bank and serves as Director of International Studies and Programs
and Graduate Research Professor of Economic Development in the Food
& Resource Economics Department at the University of Florida.
Dr. UMA LELE has authored, co-authored or edited six books of
which, The Design of Rural Development: Lessons from Africa, is
published in English and French. This book has been listed as one
of the outstanding academic books by Choice. Dr. Lele has 28
papers and articles published in Professional Journals, 41 Invited
Papers for Economic Meetings and/or published in Books and 11 Book
Academicians have often been criticized by government
officials and sometimes by other development professionals as
'Associate Professor and Chairman, Department of
Agricultural Economics, University Center of Dschang, Dschang,
being purely theorists. We all recognize that development really
takes place not in the University offices or auditoria, nor in
research laboratories or conference halls, but in the fields, in
the factories, in the hospitals, in what some of us like to call
the real world. Any genuine development requires a good knowledge
of the development problems and constraints. It requires an
awareness of the less privileged to improve their own welfare, a
strong commitment from the more privileged to improve the global
economic situation of the world. Development therefore must take
place first in the hearts.
We also know from experience that successful development
projects have nearly always been preceded by a serious study or at
least a serious thought about their relevance, their organization,
the parties involved, their finances, their social and
environmental soundness, their economic and distributional impacts,
and their sustainability. Real and successful development
therefore also takes place in the minds. We would like therefore
to theorize that development is a 3-stage process. The first stage
takes place in the heart, the second stage takes place in the mind
and third and final stage then takes place in the fields. Dr. Uma
Lele has gone through all these stages.
The brief and certainly incomplete presentation that I have
made for Dr. Lele's academic and professional achievements as well
as her commitment to development more than qualifies her to be
called "The Development Professional." Ladies and gentlemen, let
us welcome "Lady Development."
INAUGURAL FOTZO TAGNE MEMORIAL LECTURE
THE ROLE OF A SCIENTIST IN ECONOMIC DEVELOPMENT
The Director General, Dr. Kamajou, Mrs. Fotzo, Distinguished
guests, Ladies and Gentlemen, thank you very much for inviting me
to give this lecture. I consider it to be a special honor to be
asked to speak on behalf of a young scholar, whose life ended at a
tender age of 36. I decided to choose the topic "The Role of a
Scientist in Economic Development" because it would be the most
appropriate way for us to reflect on the role that Dr. Fotzo might
have played had he lived longer. It would also be a way for us to
focus on steps we could take to ensure that his memory lives on in
a very active way.
Prof. Carl Eicher, who was Dr. Fotzo's Professor and advisor
when he was a graduate student at Michigan State University, was to
give this speech. He couldn't be here because of ill health.
There is no way that I can replace Prof. Eicher, who has devoted
his entire career to working on problems of agricultural
development in Africa, but I'll try to be an acceptable substitute.
I have looked up to Prof. Eicher with great respect, learned much
from him and derived an inspiration from him to work on the
problems of African agriculture.
Another reason why I chose the topic of the role of a
scientist for my lecture is because the University of Florida has
been working with the University of Dschang to build an
institution, a university patterned after the land grant college
system in the United States which will produce qualified and
effective African scientists. I am a student of the U.S. land
grant educational system. I have also seen how the U.S. land grant
colleges played a critical role in the development of agriculture
in Asia. I have written on their role in the development of human
capital and institutional capacity (1989). I have also been very
concerned that despite the U.S.'s major comparative advantage in
human capital development and institutional capacity building, in
the last two decades USAID has overlooked this task to which it
once gave tremendous importance.
In a great deal of work that I have done on effectiveness of
foreign aid, I have stressed the major differences in the way
foreign assistance is given and utilized in Africa and the way it
was used in Asia earlier when that continent faced major economic
'Director, Office of International Studies and Programs, and
Graduate Research Professor, Food and Resource Economics
Department, University of Florida. This paper was delivered as the
keynote address of the Symposium and used to inaugurate the Dr.
FOTZO TAGNE Pascal Memorial Lecture Series in Agricultural
Economics at the University Center of Dschang.
development challenges. Some of my recent publications have been
based on the work on effectiveness of foreign assistance that a
number of colleagues from African and European countries undertook
jointly with me in the last five to six years (In Press). These
studies have shown that a small amount of well conceived foreign
assistance has had a large positive effect on economic development
in developing countries but a large amount of foreign assistance is
wasted. We have asked ourselves, "What is the nature of the small
amount of foreign assistance that has played an important role in
development, including agriculture?" We have found, that aid has
worked wherever there has been an emphasis on developing indigenous
human capital and indigenous institutions to adapt the best of
science to local circumstances, and furthermore, where these
indigenous institutions have participated actively in the process
of economic growth. It is a role that the U.S. fostered eminently
in generating the Green Revolution in India and in many other parts
of Asia. Then, "Why is it that the same role is not being played
by the U.S. in Africa?" It is a question to which I will return
Our studies of aid effectiveness have also identified areas in
which different donors have a comparative advantage, but the second
finding of our work is that by and large, donors have not played up
to their comparative advantage. They have not done things in which
they are the best, but rather, they have climbed on such bandwagons
as poverty alleviation, structural adjustment, and women's role in
agriculture regardless of their expertise to address these issues.
Thus, despite a strong U.S. comparative advantage in building human
capital and institutions of policy planning and research, the
intellectual basis for the role of land grant colleges in the
development of agriculture has eroded in the U.S. assistance, as
fashions have changed in development assistance.
At the same time, the University of Florida has been involved
in a very challenging partnership in Cameroon, perhaps for the last
time, in building capacity of the University Center of Dschang. I
would, therefore, like to explore how in the future this
partnership can contribute excellence in research and in building
policy planning capacity. We also need to generate debate in
Cameroon and on a larger scale in Africa so that this excellence
leads to rapid growth in productivity in the smallholder
I would, therefore, first like to emphasize the importance of
smallholder agriculture in the development of African countries.
It is widely recognized that the failure of African economics has
been largely a failure of their agriculture sectors, in particular,
the failure of smallholder agriculture. Smallholder agriculture
plays a particularly important role in the early stage of
development of a country by supplying food and export crops,
creating employment, generating revenues for the government,
contributing to saving and investments, and most importantly, by
creating a demand for goods and services that may be produced in
the non-agricultural sector for which the smallholder agriculture
sector through it's rapid growth provides a market. We also know
from experience now that a major way in which agriculture, and
smallholder agriculture in particular, contributes to the process
of growth is through productivity growth. Once agriculture begins
to modernize, instead of the majority of the contribution to growth
in production coming from increasing labor and land, the
contribution comes largely from technology. Increased productivity
of labor and land must constitute a major source of growth in
agriculture if economic development is to be fostered at an early
stage of development. But why is smallholder agriculture, more
important for the development of the whole economy rather than an
enclave sector (such as the oil sector which has been important in
Cameroon). It is because the development of smallholder
agriculture and the broad-base growth in productivity in that
sector requires a complex combination of factors.
I will outline what that combination of factors is and how
different it is from the development of an enclave oil sector. For
instance, mobilizing substantial amount of resources from a modern
enclave sector by taxing it heavily has relatively little impact on
the rest of the economy in terms of the employment or income
generated. In contrast, to develop the smallholder agricultural
sector requires that the exchange rate not be overvalued and that
public revenues not be generated by heavy, implicit taxation.
Furthermore, how the resources are spent once they are mobilized,
e.g. whether on roads, schools, village water, etc., influences the
extent to which the price incentives offered by the conducive macro
policy environment are transmitted to agriculture. Unlike the
development of an enclave oil sector, the development of
smallholder agriculture also requires a complex network of
institutions in the public, private, and voluntary sectors.
Besides, an effective institutional development entails substantial
decentralization of political and administrative power including
active participation of smallholders themselves in the articulation
of those institutions. Institutional development is by far the
most complex part of developing smallholder agriculture.
Development of smallholder agriculture also requires a broad-
base development of physical infrastructure. Anyone who has seen
the roads in Cameroon, in the neighboring Nigeria or in many parts
of Africa, realizes how crucial the development of rural physical
infrastructure is to enable small farmers to take out their
surpluses to the markets and to bring in modern inputs needed to
improve productivity. And not the least important, the development
of smallholder agriculture requires a broad-base increase in
technology, which has to be based on a complete understanding of
the resource constraints in which the small farmer sector operates.
The geographical dispersion of production tends to result in a
substantial diversity in production conditions in which the
smallholder sector operates. Therefore, technology development
requires a tremendous knowledge of the local resources by the
scientists involved in technology generation and by the individuals
that operate institutions building roads, supply inputs and credit,
and handle the marketing of outputs. It is these mechanisms that
determining if small farmers have the necessary price and non-price
incentives to increase production efficiently. All these services
require a sophisticated network of institutions, at several levels.
Not only do macro-economic and sectorial policies have to be
conducive, but a complex array of technologies, and a network of
commercial, participatory, and governmental institutions have to
exist that ensure the physical, financial, and informational
infrastructure. This is why the development of small holder
production is far more complex and far more demanding of policy
makers. Moreover, it uses up much of the scarce human capacity
that a country can mobilize at an early stage of development. The
experiences of Europe, North America, and Asia, have shown us how
fundamentally important such a combination of factors is to achieve
the development of small holder agriculture. Those experiences
also indicate why it is easy to develop the rest of the economy
once countries have mastered the complex art of developing
Now let me contrast what has been happening in Africa in the
thirty years since independence to these "requirements" of
smallholder agriculture. My observations are based on a major,
comprehensive study called Managing Agricultural Development in
Africa (or MADIA for short) that I and several colleagues,
including a Cameroonian colleague who is present here today, Prof.
Ntangsi, carried out in The World Bank. It concludes that there
has not been growth in agricultural productivity in Africa. Much
of the growth in production has come from area expansion often on
marginal lands resulting from growth of population. Lack of growth
of factor productivity and the use of the extensive margin can mean
growing poverty. Whereas, projections by The World Bank (1990)
indicate that the proportion of people living in poverty in Asia
(which has the largest incidence of poverty) will decline by the
year 2000 because of the rapid growth in factor productivity in
those economies (and a great deal of that growth will come from the
agricultural sectors), in Africa the proportion of the population
living in poverty is expected to increase considerably by the year
2000. These projections are based on the assumption that the
present policies, institutional structure and technology and
infrastructure continue. With improvements in these conditions
under which small holder production takes place, however, there is
tremendous potential for increasing small holder production--given
Africa's rich and diverse agricultural resources. If so, the
agricultural sectors can make a major contribution to the process
of overall economic growth in Africa.
Some of the results of the MADIA study help to bring out how
that potential can be realized in the future with examples of what
has already been realized in some countries in Africa.
Understanding the processes of growth in Africa through these
successful examples of agricultural development, enables us to
explore why some African countries have done well while other have
done poorly. These successes will permit me to draw implications
for policy and investments, as well as, for the role of the
scientist and the universities in the process of development.
I'll present the cases of three countries in East Africa and
three in West Africa that were selected for analysis in the MADIA
study. The countries in East Africa are Kenya, Tanzania, and
Malawi and in West Africa Cameroon, Nigeria, and Senegal. We
analyzed their performance in agriculture as well as the
relationship of their agricultural performance to overall economic
performance by studying the combination of factors mentioned
earlier; namely, their macro-economic policies, external shocks, as
well as, such things as the agricultural sector price and
technology policies, the development of institutions, the extent of
decentralization by governments, and involvement of small farmers.
The study illustrated that the countries that received the
most foreign aid were not the best performers. For example,
Tanzania and Senegal received nearly 15 percent of their GDP in
external assistance. Yet, these countries did the least well,
while countries that had the best policies regardless of aid
levels, performed the best. Furthermore, countries that enjoyed
favorable external shocks in that world prices moved in their favor
relative to the prices of their imports, did not do well. Nigeria,
Cameroon, and Senegal as exporters of minerals fall in this
category. In contrast, countries in East Africa which pursued
sound macro-economic and agricultural sector policies and
investment strategies did well. These countries were primarily
agricultural exporters and had terms of trade less favorable than
did the mineral exporters.
These findings raise major questions about the role foreign
assistance has played in the development of agriculture and
emphasize the importance of policies the countries have pursued at
the macro-economic level, the sectoral level, the micro level, and
the role of the range of institutions in achieving productivity
Before discussing these latter issues, I will characterize
performances in terms of growth of production of both food and
export crops, as well as the extent to which small farmers
participated in the process of growth relative to large farmers.
Kenya is an example where food and export volumes expanded rapidly,
and in virtually all crops, the share of small African farmers
expanded greatly even though large European farmers had dominated
growth in the colonial period. Malawi, too, achieved rapid growth
in its agricultural production and in its GDP, but only large
farmers participated in the growth process. The result was that
per capital standards of living in the small holder sector have
declined substantially in Malawi over time. In Tanzania there was
no growth in the 1970's and unfortunately, even the equity
objectives which the government stressed became difficult to
sustain due to stagnation and decline in the agricultural sector.
In Nigeria (the country that had the most favorable terms of
trade), the oil boom essentially destroyed its export crop sector.
Export agriculture declined, and food prices increased considerably
as labor moved out of agriculture into the urban sector. The
increase in oil revenues was not the best thing for Nigeria's
agriculture. Senegal performed poorly though it received foreign
aid of about eighty-five dollars per capital compared to two dollars
or less to countries like China or India. The reason is that
Senegal neglected its agriculture and promoted import substitution,
away from the export crop sector to the production of rice on the
one hand and to industrialization on the other. Cameroon has been
by far the most enigmatic case. Part of the reason is that until
about 1984-85 Cameroon appeared to perform well in GDP growth, as
well as in the growth in the agriculture sector. In fact, when we
contrast the case of Nigeria and Cameroon, oil revenues were used
less ineffectively in Cameroon relative to Nigeria. Cameroon's oil
boom commenced later with the second oil price rise in the late
1970's rather than with the first price rise in 1973 as in Nigeria
and Cameroon used part of its earnings to retire its debt, although
information on the use of oil resources by Cameroon is opaque at
best. The situation has deteriorated considerably in Cameroon
Macro-economic policies were not very conducive in countries
that did not perform well. In anglophobe countries, the overvalued
exchange rate has generally played a negative role by leading to
implicit taxation of the small holder sector. Cameroon's
participation in the monetary union still continues to leave a
major question mark about the exchange rate overvaluation. Indeed,
the whole question of the exchange rate in the CFA zone has been so
controversial that it has resulted in a substantial difference of
opinion between the World Bank and the government of France. Now
that I am on leave from The World Bank working at the University of
Florida and I have the academic freedom, I urge that the question
of the exchange rate be looked at in the Cameroonian case, simply
because the neighboring Nigeria has devaluated very substantially.
This differential in the exchange rates among the two countries
adversely affects the competitiveness of Cameroon's agriculture.
The export crop sector in Cameroon continues to be taxed
implicitly, and the food crop prices tend to be highly favorable
relative to export crop prices.
The contrasting examples of Kenya and Cameroon are worth
noting in this regard. When the coffee prices were at their peak
in 1976-77, the ratio of producer price of coffee to maize in Kenya
was 44 to 1, compared to a ratio of 6 to 1 in Cameroon. This is
because relative food prices have been substantially higher in
Cameroon than they have been in Kenya, whereas export crop prices
have been lower relative to Kenya. That explains in part why
coffee in Kenya has been considerably more profitable than in
Cameroon. As a consequence, not only has acreage expanded in Kenya
in this period of rising coffee prices, but yields per ha. of
smallholders producing coffee are three times as high in Kenya as
in Cameroon. Thus, major outstanding questions remain related to
the role of the exchange rate in fostering agricultural development
Kenya's public expenditure patterns have also greatly
encouraged the development of the small holder sector in contrast
to most other countries in the MADIA study. For example, many
countries in Africa and indeed in Asia can learn lessons from the
role the decentralized administrative structure in Kenya has played
in the development and maintenance of feeder roads. In contrast,
tremendous centralization of political power in Nigeria since
independence has lead to considerable erosion of local governments,
institutions, and roads. Large amounts of resources allocated in
the World Bank projects to building feeder roads in Nigeria and
Tanzania resulted in very little net increase in road mileage.
This is because within two years after the roads were built, some
were unusable due to a lack of capacity at the local institutional
level to carry on routine maintenance. The more we consider the
role of local institutions, the more we realize how closely their
development is related to development of an economy. Effective
decentralization of government and the vesting of administrative
and political authority to the local level are essential if local
institutions are to develop the capacity to do such things as
maintain roads, primary schools, and water and other systems
important for good health.
Primary education plays a very important role in the ability
of small farmers to adopt complex new technologies, and economists
have shown over and over that investments in education have high
payoff through the role they play in fostering productivity growth-
-especially when modern technology is introduced. Kenya's record
of expansion of primary education to small farmers in substantially
better than that of several other countries. Evidence also
suggests that investment in primary education of women in
particular as distinct from primary education for the population in
general, plays an important role in productivity growth, especially
given women's central role in food production in Africa. Again
Kenya's record on access of women to primary education has been
considerably better. I can provide numerous such examples of
policies, investments and institutions which have been more
favorable in Kenya than in other African countries and they have
significantly affected the breadth of agricultural growth.
What are the implications of this for future growth in
productivity if we realize that countries' own policies make the
big difference, rather than favorable external shocks or external
assistance. This is where the capacity of indigenous institutions
and human capital make a significant difference. Constraints to
smallholder agriculture tend to be numerous and highly location
specific. Tailor-made and flexible responses are required for the
effective delivery of a set of services to meet the diverse local
needs. Scientists working jointly with farmers can play an
important role in understanding the constraints under which
smallholders operate and in designing appropriate interventions to
relax these constraints.
If I may share my personal experience in working in Africa
over the last twenty years and in trying to forge collaborative
arrangements with African scholars in doing rural development work
in Africa, there is a significant difference among countries in the
extent to which participation by local universities is fostered by
governments. Whereas, some countries have provided a conducive
atmosphere for participation of universities and in the
development of their local institutional capacities, in other
countries such participation has been seen by African governments
as threatening. And for those of us coming from outside who have
realized the importance of building scientific capacity, it has
been very discouraging to see that governments have often been
suspicious of their own universities, while being very willing to
accept large amounts of technical assistance without much
questioning. The World Bank has estimated technical assistance to
Africa to be close to four billion dollars annually. A great deal
of the foreign technical assistance is not particularly useful to
Africa. Foreign technical advisors come for a short period of
time. By the time they learn something about the problems of the
country, it's time for them to leave. New foreign technical
advisors come, they spend time to learn the problems and then it's
time for them to leave as well. One can see why this arrangement
of using foreign technical advisors is in some ways convenient for
governments. Such advisers are rarely in a position to ask
fundamental questions about domestic economic policies or
strategies. Local nationals stay in the country and they bring to
bear an institutional memory to addressing problems. This can be
inconvenient to the governments who discourage pluralism of ideas,
but it is the fundamental requirement for smallholder development.
I hope that the collaborative arrangements that the University
of Florida has forged with the University Center of Dschang--to
which this agricultural symposium is a testimonial--will flourish
and that USAID will not turn this into the last university
development project, but rather see it to be a harbinger of change
in development assistance to Africa. Such an event would be the
best tribute we could pay to the memory of Dr. Fotzo. Thank you
for giving me the opportunity to speak on this moving occasion.
Lele, Uma, and Arthur A. Goldsmith. "The Development of National
Agricultural Research Capacity: India's Experience with the
Rockefeller Foundation and Its Significance for Africa."
Econ. Develop. and Cultur. Change. 37(1989):305-43.
Lele, Uma. ed., Aid to African Agriculture: Lessons from Two
Decades of Donor Experience. Baltimore: The Johns Hopkins
University Press, 1992.
The World Bank. World Development Report 1990. Oxford: Oxford
University Press, 1990.
SESSION 1: AGRICULTURAL POLICY ANALYSIS FOR THE 1990s
STRUCTURAL ADJUSTMENT IN CAMEROON
AND IMPLICATIONS FOR AGRICULTURE
This paper reviews the objectives and content of the Cameroon
structural adjustment program and its likely impact on agriculture.
It is shown that the program aims essentially at establishing a
competitive and efficient economic system by restoring the
equilibrium of the budget and current account, by eliminating
distortions in prices, markets, and trade as well as in the
institutional framework, and by redefining the relative roles of
the public and private sectors. The effect of structural
adjustment on agricultural development in the long-run is then
presented as largely positive, despite a number of problems
confronting the program.
By comparison to most Sub-Saharan African (SSA) countries
Cameroon was a late-comer to structural adjustment. While such
countries as C6te d'Ivoire, Togo, Guinea, Senegal, Ghana, Benin,
Nigeria, and Zaire had embarked on a structural adjustment program
during the early and mid-eighties with or without the support of
the World Bank and the IMF (International Monetary Fund), Cameroon
did not sign a stand-by arrangement with the Fund until September
1988 and a structural adjustment loan (SAL) until June, 1989.
The reason is that by SSA standards Cameroon was considered an
island of prosperity up until 1986. The country's GDP grew at 4.8
percent in real terms during the period 1960-78 and at the
impressive rate of 8.2 percent between 1978 and 1986. Agriculture
was the major factor in this growth between 1960 and 1978 when its
shares in GDP and exports averaged 30 and 74 percent, respectively.
When Cameroon became an oil producer in 1978, agriculture's share
declined to 22 percent of GDP and 51 percent of exports. The
growth of the agricultural sector has averaged 3.8 percent since
independence, the transformation of agricultural products has
IThe author, a Cameroonian national, holds a Ph.D. from the
University of California at Berkeley, USA, is an economist at the
World Bank Resident Mission in Yaounde, Cameroon, and teaches
development economics at the University of Yaounde.
constituted the point of departure for industrialization, and
Cameroon is one of the few countries in the region to have achieved
virtual food self-sufficiency. This reasonably good performance
may be attributed essentially to three factors--resource
endowments, prudent economic management at least up to 1982, and a
not-too-hostile external environment.
Since 1986, however, Cameroon has been trapped in a deep
economic and financial crisis. GDP declined by more than 15
percent between 1987 and 1990, and for the first time in the
country's history, government operations recorded a large deficit
of CFA franc (CFAF) 508 billion in 1987--12 percent of GDP.
Although the immediate cause of the decline was external shocks,
the sudden collapse of the economy brought to the surface a number
of internal structural problems which had been in existence for
some time, but which had been concealed and indeed aggravated by
the fortuitous oil boom. These structural problems included an
overgrowth of public expenditures and a crisis in public finance,
a high domestic cost economy, and a stagnant and non-competitive
industry in both the international and domestic markets. The
structural problems may be attributed essentially to too much State
interventionism, excessive centralization of decision-making,
policies that cause major distortions in economy, a weak
institutional and legal framework, and poor economic management.
The structural adjustment program (SAP) is a response to the
country's structural problems and external shocks. Given the fixed
parity of the CFAF vis-a-vis the French franc (CFAF 50= 1 FF),
external adjustment through devaluation is not possible without the
agreement of the other member countries. Instead the SAP is based
on internal adjustment emphasizing liberalization of economic
activity, a more limited role for the State in favor of the private
sector, reliance on markets, and increased competition and
efficiency to reduce domestic costs and prices. In other words,
SAP is a policy reform program aimed at reducing the country's real
This paper briefly reviews the objectives, content of, and
progress with the various components of the SAP and then analyzes
the implications of the program for agricultural development.
The Structural Adjustment Program
The Cameroon SAP is supported by a Wold Bank structural
adjustment loan (SAL) approved in July 1989 in the amount of US 150
million dollars, to be disbursed in three trenches. The SAL was
also preceded by an 18-month stand-by arrangement with the IMF,
approved in September 1988, equivalent to SDR 69.5 million and a
purchase of SDR 46.4 million under the compensatory financing
facility. The SAP is also supported by other donors, notably the
African Development Bank and the French through the CCE (Caisse
Central de Cooperation Economique).
The SAP program consists of four interrelated components
discussed below. These are: (1) macroeconomic stabilization, (2)
price, market, and trade reform, (3) public enterprise and banking
sector reform, and (4) reform of the institutional, legal and
regulatory framework and redefinition of the relative roles of the
public and private sectors. Because of the strong
interrelationships among these four components, they are being
implemented simultaneously and not sequentially. At the same time
the SAP is supported by two other World Bank projects the
economic management support project (PAGE) and the social
dimensions of adjustment (SDA).
The IMF assumes the major responsibility for this component
under its standby arrangement. Table 1 provides information on the
evolution of key macroeconomic indicators of performance of the
Cameroon economy. Beginning in 1986/87, the data show unfavorable
trends in GDP growth, the Government budget, the current account
balance, and the level of external indebtedness.
Macroeconomic stabilization is aimed primarily at restoring
the equilibria of the budget and current account as well as
lowering the level of the country's external indebtedness to a
Cameroon's first stand-by covered the period from September
1988 to June 1990 and the second stand-by is expected to run for 9
months beginning January 1992. Macroeconomic stabilization is a
short-term objective usually lasting only for a few years. All the
other components of the SAP are supported by the World Bank and
have medium to long-term objectives.
Price, Market, and Trade Reform
Policies pursued since independence and, in some cases since
colonial times, have produced major distortions in prices, markets,
and trade. Price and wage controls which were instituted during
the colonial period for specific commodities and wage categories
were extended after independence to cover virtually all tradable
goods and wage categories. Domestic prices were either fixed or
officially approved on a cost-plus basis with a fixed profit
margin of 12 percent above production costs. Using civil service
salary scales as a reference, wages have been controlled through
the labor code which fixes minimum wage rates for all categories of
workers according to their formal training, regional location, and
sector of the economy. Cameroon's trade policies have also been
highly protectionist. The country's trade policy was dominated by
an import-substitution strategy which required high levels of
tariff and non-tariff protection of domestic production against
Table 1. Key Macroeconomic Indicators of Performance.
1965 1980 1986 1987 1988 1989
/75 /86 /87 /88 /89 /90
GDP Growth (%) (Real) 4.8 8.2 -4.7 -13.5 2.2 2.8
Oil Industry 23.5 -0.2 -69.0 -53.0 5.6
Agriculture 4.6 1.9 7.5 2.3 -1.6 -5.1
Industry 4.4 15.8 -5.6 -7.1 -11.0 -6.9
Service 0.2 4.6 -4.6 -10.1 -2.0 -7.4
GDP Sectoral Shares 100.0 100.0 100.0 100.0 100.0 100.0
Oil Industry 14.7 6.3 6.3 6.2 7.6
Agriculture 32.7 23.621.0 24.6 25.8 26.9 26.6
Industry 20.3 40.7 22.3 22.3 20.8 20.2
Service 47.0 46.8 45.6 46.1 45.5
Government Budget Surplus/Deficit
Current Account Balance (%GDP) 2.4 -12.0 -6.4 -4.3 -7.2
Public Debt to GDP (%)
Agricultural Exports -5.2 -9.2 29.7 -8.2 -2.9 -2.3
(% share of total) 11.9 20.9 36.0 40.2 41.8
77.0 35.8 48.0 49.0 50.0
Sources: International Monetary Fund, Article
April, May 1990.
World Bank, SAL Memorandum to Executive Directors, May
16, 1989, 1990.
Non-tariff protection has mainly been in the form of
quantitative restrictions (QRs) on imports and of import licenses.
All products designated as "sensitive" or "strategic" were subject
to QRs. Regulations affecting Cameroon's international trade are
set out in the Programme General des Echanges (PGE) and in the 1988
PGE a total of 156 products were subject to QRs. All imports have
been subject to import licenses. Additional customs and fiscal
advantages have been granted through the investment code and
special protection regimes through the context of regional
arrangements. Imported finished products are subject to very high
Price/wage controls and the over-protection of the Cameroon
economy have resulted in monopolistic and oligopolistic market
structures which allow producers to operate with higher cost and
higher prices than would be the case without controls. As a
consequence, these measures have made Cameroon less competitive in
The market-reform component of the program aims essentially at
liberalizing prices and wages, and replacing quantitative
restrictions with tariff protection in order to encourage
competition and efficiency both of which are needed to lower
production costs and prices and make Cameroon more competitive in
international markets. There has been substantial progress with
the rationalization of the macroeconomic and institutional
environment. In the domain of external trade QRs were removed for
68 products in June 1989, for a second group of 46 products in
February 1990, and for a third group of 26 products in January
1991. Only 16 strategic products remain subject to QRs. Most of
these are agricultural--for examples, rice, sugar, vegetable oils,
and flour. Concomitantly, import licenses were abolished for all
products not subject to QRs. Similarly, price controls were
relaxed in January 1989 for all except 35 products and 10
categories of services. These numbers were further reduced during
the second phase in June 1989 to 26 and 7, respectively. And, in
January 1991 the products were reduced to 16.
The reforms also provide greater incentives for
industrialization and export. A new investment code was adopted in
November 1990. Major innovations were the elimination of duty
exemptions in favor of fiscal advantages and the incorporation of
the one-step window (quichet unique) to simplify procedures for
creating new businesses and accessing benefits of the code. Export
taxes have been eliminated for all exports except timber. A new
law on commercial activity was adopted in August, 1990.
Furthermore, the new labor code aimed at deregulating wages,
reducing the cost of labor, and facilitating its mobility and
productivity is being finalized with Bank assistance.
Public Enterprise and Banking Sector Reform
The existing policy framework in Cameroon has been
characterized by direct State intervention in the production and
distribution of goods and services. Many forms of direct State
intervention had their origin during the colonial period. At
independence, State intervention was significantly reenforced and
extended based on the conviction that such intervention was
necessary for, and indeed synonymous with, rapid development.
Moreover, aid donors promoted State intervention during the sixties
and seventies through their financing.
Between 1960 and 1990 a total of exactly 200 public
enterprises (PEs) were created in the non-financial and financial
sectors (Development Finance Consultants, p.l). The performance of
these PEs has been globally unsatisfactory--due essentially to
their politization and use for patronage, a lack of autonomy and
accountability in management, and an environment that did not
encourage productivity. As a consequence, the PEs have contributed
to the crisis in public finance--directly through State operating
and investment subsidies to PEs and through the servicing of
external guaranteed debt by the State for PEs in difficulty, and
indirectly through default in the payment of taxes by most PEs.
Subsidies to PEs still in activity today were CFAF 32 billion in
1983/84, 69 in 1984/85, 68 in 1985/86, and 98 billion in 1986/87.
Because of the crisis in public finance subsidies were cut to 13
billion in 1987/88 and 17 billion in 1988/89 (Development Finance
Consultants, p.23). PEs have also been a burden to the rest of the
economy through their indebtedness to banks and suppliers. The
total indebtedness of PEs in activity stood at CFAF 1030 billion in
1988/89 (Development Finance Consultants, p.27).
Under the program, efforts to reduce direct State intervention
have centered on PE and financial sector rehabilitation. In the
case of non-financial sector PEs the strategy has been to maintain
in the State portfolio only those that are strategic. Decisions
have been made on 67 PEs and of these 28 have been maintained in
the State's portfolio, 21 have been (or are being) liquidate and 18
are being privatized. Some PEs maintained in the State's portfolio
are of dubious strategic importance. Similarly, of 14 financial
institutions (commercial banks and specialized development
institutions) on which decisions have been made, 4 have been
liquidated, 1 has been transformed, and 2 have been fused;
furthermore, the State has withdrawn as the majority shareholder
from the largest four commercial banks.
Institutional Reform and Role of the State
This component of the program covers the reform of the
institutional, legal and regulatory framework and also requires the
rationalization of the role of the State. Again the strategy is to
reduce the role of the public sector in the direct production and
distribution of goods and services that are non-strategic or do not
have public utility and to increase reliance on the private sector.
The growing complexity of a modern economy makes overly centralized
decision-making practically impossible. The public sector has not
performed well, if at all, the numerous functions of an
interventionist State and the efforts to do so have led to
excessive politization and corruption generated by over-extended
and overbearing public sectors. The program aims at eliminating
many functions that the State has attempted to perform in the past
while strengthening a number of other functions.
Two key functions of the State must be reenforced. One is an
enabling environment that promotes economic activity through the
provision of a fair and transparent institutional, legal and
regulatory framework. This framework includes liberalization
policies (elimination of such things as price and wage controls,
quantitative restrictions, and import licenses); privatization and
liquidation of public enterprises; the simplification of laws and
procedures for contracts, declaration of bankruptcies, etc.; the
accessibility of information to investors and consumers; the
promotion of exports; the provision of basic infrastructures; the
rationalization of the tax system and fiscal administration;
decentralization of decision-making; and the establishment of a
dialogue with the private sector. The other main function is the
development of the capacity for analyzing and managing
macroeconomic and sectoral policies.
Under this component of the program the reforms that have been
completed include a new investment code and a new law governing
commercial activity. Reforms in progress include: a new labor
law, a new general statute for public enterprises, a new forestry
law, a new cooperative law and civil service reform.
The Contribution of PAGE and SDA
PAGE provides SAP with additional financing for undertaking
important specific tasks such as studies on civil service reform,
public investment programming, and public enterprise
rehabilitation. The SDA project is directed toward attenuating the
social hardships that result from adjustment. The project thus
seeks, among other things, to promote employment (for example,
through the creation of small enterprises), community development,
basic health and education, and programs for women in development.
Implications and Prospects for Agriculture
In agriculture the SAP includes two components which should
logically have a positive effect on agricultural development--these
are, (1) the disengagement of the state from a number of
agricultural activities, and (2) the elimination of distortions in
the macroeconomic, legal, and regulatory environment which bears on
agriculture. However, as we shall see, there are some other
problems. One is that macroeconomic stabilization is likely to
have adverse effects on agricultural development in the short-run,
though not necessarily in the long-run.
Disengagement of the State from Agricultural Activities
The State has progressively been withdrawing or has withdrawn
from many agricultural activities in favor of the private sector
and this is expected to result in greater efficiency. Many of the
functions in export crop and agricultural input marketing are being
progressively transferred to the private sector and the State has
completely withdrawn from the food crop market.
State marketing of cocoa and coffee through ONCPB, the
Marketing Board, has been costly, inefficient and inadequate for
several reasons. First, the Board's operating costs increased from
CFA 6 billion francs in 1978/79 to CFA 11 billion in 1986/87
without an increase in the volume of produce handled (Agrer, 1988,
p.25). Second, the granting of monopoly to private buyers of cocoa
and coffee in their zone of purchase and their remuneration on the
basis of the "bareme" which are administratively determined
marketing costs and profit margins have resulted in gross
inefficiencies. Third, the rigidity of the stabilization system
has proved to be ill-adapted to international price instability and
has recently resulted in the heavy deficits in the cocoa and coffee
industries. Fourth, the existence of large stabilization reserves
in the past have often resulted in the temptation by the State to
Under the SAP, internal and external marketing of cocoa and
coffee have been liberalized and ONCPB has been severely reduced
from a structure of 3800 employees to one of 500 under ONCC. This
number will subsequently be reduced to 150. ONCPB's function of
financing development activities from its reserves was discontinued
in 1988 when the organization became bankrupt. It is hoped that
liberalization will substantially reduce marketing costs and result
in a higher residual for the farmer--especially since prices were
slashed by about 50% in 1989 largely as a consequence of the
collapse of the world market prices in 1985/86.
The inefficiency of State marketing is also evident in the
marketing of foodstuffs and agricultural inputs (fertilizers,
pesticides, and small equipment); in both cases marketing costs
have been higher than for private traders, and in the case of
inputs, farmers have had to face the additional problem of late
delivery. As a result, MIDEVIV (Mission de Developpement des
Cultures Vivrieres et Maraich6res) largely abandoned food marketing
three years before the decision was formerly taken to liquidate the
structure in 1989. MIDEVIV is also in the process of privatizing
its seed multiplication operations. Since 1987 the USAID has been
assisting the government in establishing a private marketing system
for fertilizers and in 1990, FONADER, the State agency which had
been in charge of input acquisition and distribution, as well as
input subsidies, was also liquidated.
There has been a general disengagement of the State from
intensive agricultural extension institutions and integrated rural
development projects which though very costly have had little
impact on agricultural development. The proliferation of intensive
extension institutions in many regions of the country were
superimposed on the existing traditional extension system of the
ministry of Agriculture, resulting in two parallel and overlapping
systems and a waste of resources. The withdrawal of the State has
resulted in massive liquidations of these institutions (the case of
SODECAO, SEMRY to be liquidated over three years and UNVDA,
CENADEC, and SODERIM which have already been liquidated). Another
example of where State intervention is being withdrawn is in the
area of cooperatives which have largely been run by civil servants
and whose effectiveness had been undermined. Most of these
cooperatives had become bankrupt and had not represented the
interests of their members--especially the farmers. A new
cooperative law is under elaboration which will guarantee the
autonomy of cooperatives and farmers will be allowed to manage
their own affairs. In short, there is a general movement away from
a paternalistic approach to development. A final area of State
disengagement in favor of the private sector is in forestry. In
this Sub-sector the operating costs of ONADEF and CENADEFOR had
become unbearable. Forests have been exploited at a rapid pace
without adequate regeneration. As a consequence, the country's
ecosystem has been threatened even though government revenue from
the sub-sector has been far below potential. The two institutions
have been liquidated, the role of the Department of Forestry will
be strengthened, and the establishment of inventories and
regeneration activities will be handled by the private sector on
the basis of large-scale concessions. Only the general conception
and regulatory roles are being retained by the Forestry Department.
In general, not only were the various forms of State
intervention costly, inefficient, and ineffective, but also the
institutions which absorbed the bulk of public investment in
agriculture created a bias against small-holders in favor of the
modern sector. For example, during the period 1971-80, 60 percent
of public investment resources in agriculture were concentrated in
the modern sector (Ministry of Agriculture, 1980,III and 9) which
produced only 10% of the agricultural output (Ministry of
The Elimination of Distortions
Cameroon is believed to have a comparative advantage in
agriculture. The removal of distortions from the macroeconomic,
legal, and regulatory environment should result in greater
competition and efficiency (economy-wide and in agriculture). If
so, Cameroon should become more competitive in international
commodity markets. Moreover, new and expanded markets generally
result in economies of scale which permit further productivity
The Impact of Macroeconomic Stabilization
One of the objectives of macroeconomic stabilization is to
absorb the budget deficit by some mix of increasing revenues and
reducing expenditures. The removal of distortions under the SAP
involves eliminating the export taxation of agriculture as well as
subsidies on agricultural inputs. However, the budgetary effect of
eliminating export taxation is more than compensated for by the
elimination of input subsidies. Also, macroeconomic stabilization
has resulted in a 69 percent cut in public investment expenditures
allocated to agriculture between 1987 and 1990 as compared to 48
percent for the rest of the economy. In the short- and medium-runs
these factors are bound to have a devastating effect on development
of the agricultural sector.
The SAP has been beset by a number of problems. First, while
the liberalization of external and internal trade is central to the
reform program, the will to change has not always been matched by
the ability to effect the change. The capacity for Cameroon
producers to adjust to lower levels of protection requires a more
detailed analysis to determine the tariff rates necessary to induce
progressive adjustment and the effects of over-supply (which give
rise to dumping) on the world market. So far there have been
insufficient statistical data to monitor the effects of
liberalization. Similarly in the liberalization of internal
marketing for cocoa and coffee the main problem is how to go from
the existing to the new system. It remains to be seen whether the
preconditions for the private sector to operate efficiently exist--
including free entry, information, factor mobility, existence of
financial markets, and access to credit. It is not so much the
principle of liberalization as the sequencing, phasing, and pace of
liberalization. This point was underscored recently by the fact
that the Minister of Industrial and Commercial Development had to
reintroduce QRs for some products that had already been liberalized
to save the producers from going out of business. This means that
if liberalization is not closely monitored it could have disastrous
Second, adjustments to liberalization is not helped by the
fact that they are taking place in the context of an acute
financial crisis both for the State and the private sector. The
State is not in a position to pay its arrears to the private
sector, nor does the liquidity problem of the banking sector permit
it to grant loans to the private sector, particularly long-term
credit for manufacturing. Furthermore, the State cannot afford the
funds with which to rehabilitate the PEs and financial sectors and
to finance agricultural research and extension.
Third, there has for long been a lack of strong political
commitment to the adjustment program, a lack of policy dialogue
between the public and private sectors, and a general lack of
confidence of the latter in the former. "Many in the private
sector do not know where the economy is going, as they are unsure
about the nature of the rules of the game" (FIAS, p.3). The
situation is compounded by the fact that the private sector is
generally opposed to the thrust of the liberalization programs
(which break their monopolistic and oligopolistic powers).
Fourth, there has been a basic contradiction between the
short-term goal of stabilization of macroeconomic aggregates
generally pursued by the IMF and the medium-term objective of
growth sought by the World Bank. For example, cuts in the public
investment program have improved the State's financial situation in
the short-run but compromised growth in the medium-run.
Fifth, the problem of over-evaluation of the CFAF remains a
major counteracting factor to the adjustment effort and
demonstrates the limits of internal adjustment. For example,
despite the good management of HEVECAM and CDC (which produce
rubber) the two PEs remain noncompetitive in the world market.
Finally, the advent of multiparty politics and democratization in
Cameroon may make it more difficult for political leaders to take
tough adjustment measures.
Recent experience with the program seems to show that the
crisis may turn out to be a blessing in disguise. In the public
sector the crisis in finance, the bankruptcy of many PEs and the
lack of liquidity in the banking sector, have forced the State to
disengage from many activities in favor of the private sector. Such
disengagement would probably not have happened without the crisis.
With subsidies cut off, PEs have to survive on their own or die.
In the face of massive lay-offs of workers in the private and
parastatal sectors, and the existence of widespread unemployment,
new recruits (for example young university graduates) are willing
to accept lower wages (even before the new liberal labor code is
voted) and public and parastatal staff is willing to accept
important cuts in fringe benefits rather than risk the prospects of
lay-offs. Political leaders are suddenly realizing that cutting
public sector wages is politically less dangerous than not paying
wages at all. Thus many components of the reform program
considered only a year ago as revolutionary are now being adopted
wholesale. Ironically therefore the severity of the crisis may
actually result in a faster pace of adjustment.
Furthermore, democratization will almost certainly result in
a depolitization of management, and therefore in greater
accountability, transparency, efficiency, and punishment of poor
and corrupt political leaders and managers. Finally, of vital
importance for agriculture, is the fact that unemployment and low
wages in the urban sector is bound to force young people to return
to agriculture and there are signs that this is already happening.
1. Cited References:
AGRER. Secteur Aqricole: Rapport Final. Mission de Rehabilitation
des Entreprises du Secteur Public et Para-public, MCM/PS,
Presidency of the Republic, Yaounde, Cameroon, 1988.
Development Finance Consultants. Impact du Programme de Reforme
des Entreprises Publiques au Cameroun, MREP, MCM/PS,
Presidency of the Republic, Yaounde, Cameroon, 1990.
Foreign Investment Advisory Service (FIAS). Cameroon Agricultural
Sector Report. Washington, D.C., 1990.
Ministry of Agriculture. Bilan Diagnostique du Secteur Agricole
(1960/1980). Direction Etudes et Projets, Yaounde, Cameroon.
2. Related References:
AGRER. Etude Diagnostique de 1'ONCPB: Rapport Definitif. MREP,
MCM/PS, Presidency of the Republic,Yaounde, Cameroon, 1989.
Lele, Uma. Agricultural Growth, Domestic Policies, the External
Environment and Assistance to Africa: Lessons of a Quarter
Century. MADIA Study. IBRD: Washington, D.C., 1989.
Maxwell Stamp Associates. Etude de Systeme de Protection Tarifaire
au Cameroun: Rapport Final. MINDIC, Yaounde, Cameroon.
SEtude Compl6mentaire sur le CoQt de la
Protection et l'Impact de la Liberalisation du Commerce au
Cameroun. MINDIC, Yaounde, Cameroon.
Ministry of Agriculture. Politique Agricole du Cameroun. Division
des Projets Agricoles, Yaounde, Cameroon, 1990.
World Bank (The). Cameroon Agricultural Sector Report. Washington,
TOWARDS A SUSTAINED DEVELOPMENT OF THE FOOD AND AGRICULTURE
SECTOR OF THE UDEAC MEMBER COUNTRIES
Wilfred A. Ndongkol
It is paradoxical to find that the Brazzaville Treaty of
December 1964 which created the UDEAC (Central African Customs and
Economic Union)2 failed to address problems of food and the
agricultural sectors.3 Rather, the treaty emphasized custom
problems of economic exchanges among member countries with no
mention of possible cooperation in the agriculture sector. It was
only in 1971 that the meeting of Heads of State of UDEAC directed
the Secretary General to explore the possible avenues of future
cooperation in agriculture. As a result, a Special Commission for
Agriculture was created in 1973. And, in 1974, the revised UDEAC
Treaty incorporated the agricultural sector as an important and
vital area of sub-regional cooperation.
At the Council of Heads of State meeting in 1975, the group
manifested their determination for a viable agricultural
development policy with a special focus on food self-sufficiency.
As a result of that new political will, three institutions were
created--the Department of Rural Economy at the General Secretariat
of UDEAC, the Conference of Ministers in charge of Animal
Husbandry, and the Permanent Commission for Agriculture.
Today, as we enter the 1990s with thousands of African people
still dying from starvation and malnutrition, it is legitimate to
ask, "What has gone wrong with African agricultural and food
policies that could have contributed to such a disappointing
performance in the sector?", and "How far have African governments
and their external partners gone in reversing this situation?"
What follows is an attempt to answer these questions through
an examination of the food and agriculture sectors of the UDEAC
member states with particular reference to the agricultural
policies which have been initiated by individual member states and
by the union as a whole.
'Professor, Department of Economics, University of Yaounde,
CRED/ISH, Yaounde, Cameroon.
2 This Union is made up of Cameroon, Chad, Congo, Gabon,
Central African Republic, and Equatorial Guinea.
3Within the nations involved, 11 to 43 percent of GDP is
generated by the agriculture sectors and they provide between 70
and 85 percent of total employment.
For purposes of logical analysis and presentation, the paper
is divided into sections. An analytical survey of the performance
of the food and agriculture sectors of the UDEAC member states is
undertaken in the next section. The third section is focused on
the assessment of the current trends in inter-country cooperation
in food and agriculture among the UDEAC countries. The final
section examines the strategic areas and possible programmes in the
food and agriculture sectors which require sub-regional
Analytical Survey of the Performance
of the Food and Agriculture Sector
The percentages of the population in the rural areas of the
UDEAC member countries range between 35 and 82, and the
agricultural sectors contributes more than 25 percent of GDP in
most countries except for Gabon and Congo where the rate is about
12 percent (Table 1). The growth rate of agricultural production
was 2.2 percent in 1980-87 against 3.1 percent for the population.
In view of the above evidence, it can be argued that the food
situation in the UDEAC member countries is alarming and justifies
the commitment of the Heads of State to the realization of food
self-sufficiency as the corner stone of economic development in the
region. All the member states of UDEAC have endeavored to
introduce policy reforms designed to facilitate the attainment of
self-sufficiency in food supplies.
To some extent, however, this commitment has not been
translated into action programs. As a consequence, there have been
wide differences between declared policies and practical
achievements. Public investments in agriculture have remained far
below the 20-25 percent of total expenditures recommended in the
African Priority Programme for Economic Recovery (APPER) and have
in general been inadequate.
Furthermore, in the 1980s, the agricultural sectors were
largely dominated by export crops, small farms with traditional
technologies, and low levels of productivity. Cereal imports have
at least doubled in most countries. However, a closer look at the
case of each country reveals enormous differences.
Time and the lack of information on the agricultural policies
of the different countries over years did not permit an assessment
of the impact of donor policies on the elaboration and
implementation of national agricultural policies of member states.
Nevertheless, most of the recommendations of the donor community
were tied to aid, and therefore, implemented. We simply assume
here that they accounted for a part of the results observed.
Measures of the Importance of the Agriculture Sectors in
urvey o conom c an o ;
and The World Bank.
Despite the decrease in its share of GDP (30.2 percent in 1981
against 24 in 1986), agriculture remains the key sector of the
economy of the nation. It employs 59 percent of the active
population and contributes about 42 percent of exports. Cameroon
is able to meet 80 percent of the national demand for food and is
among the few countries in Africa to enjoy reasonable self-
sufficiency. However, this is not the result of an adequate food
policy, but rather, the consequence of the dynamism of its rural
population and the diversity-of its climate.
Although government intervention in the Agriculture sector has
been quite extensive (between 20 and 32 percent of the projected
investments under the first four five-year plans (1961-81) were
devoted to Agriculture), policy and planning efforts have had very
little impact on the performance of the sector. Comprehensive
policies for the agricultural sector have not been made, and
pricing and marketing policies have been focused on export crops
only. The best lands, extension services, research services and
subsidized inputs have been devoted to export crops.
Despite the fact that the previous development plans called
for the promotion of food crops, it was not until the middle of the
1970s that actions were taken. MIDEVIV (Mission de Developpement
des Cultures Vivri6res et Maraich6res) was created to promote the
GDP of Agriculture
Agriculture Population as a % of Agriculture Cereal
Sector as a % Total Active Share of Total Imports
of Total GDP Population Exports (1000s of
1981 1987 1986 1981 1986 1989 1981 1986 1974 1987
Cameroon 30.2 24 -- 69.2 59.3 57 42.8 42 81 290
Central 39.5 41 -37.9 71.5 62.4 -62 35.8 44.2 7 37
Congo 9.5 12 -8.6 62.2 45.5 -60 0.9 17 34 97
Gabon 6.0 11 -10.1 75.0 62.9 -73 0.6 0.44 24 56
Equatorial 41.5 (45) -50 65.2 45.1 -57 81.2 73.7 -- --
Chad 41.6 43 -46.7 82.8 81.5 76 89.1 18.7 37 71
V l"A C _f EV 4i d S A, l I 'iirr7 Af
oJUrLe.L L,- o
marketing of food products. Later, SEMRY was set up for the
distribution of seeds and improved varieties of plants and SODERIM
for rice production.
Furthermore, many "integrated rural development projects" were
to be set up to promote the development of food crops as one of
their goals. Most of these projects never came into existence, and
the food-production performances of those which did were very
disappointing. The main reason for failure, despite official
statements, was that the extension services did not have a
technical package to offer to the small farmers. This problem was
in turn due to the inadequacy of the research undertaken on food
The ongoing agricultural policy is defined in the Sixth Five
Year Plan, whose objectives in regard to food production are the
intensification of rice production through the creation of new
projects or the extension of the existing ones (SEMRY, SODERIM.
.); the implementation of regional integrated rural development
projects (South, East, Littoral and South West) with emphasis on
food production; promotion of specific projects of agricultural
mechanization and motorization; reinforcement of the interventions
of "Banque de Credit Agricole", formerly FONADER; and the promotion
of exploitationss agricoles de Moyenne importance."
It should be noted, however, that this Plan is not different
from the former ones in regard to its policy guidelines and
objectives. It remains vague on the measures to be taken to
achieve its objectives. Concerning the credit to small farmers,
the conditions of its mobilization and distribution are not spelled
out. Everything depends on the newly created "Banque de Cr6dit
Agricole." With this Bank now operational, it is evident at least
to Cameroonian "small-farmers" that the formula for accessibility
to credit has been established.
Coming after the adoption of African Priority Programme for
Economic Recovery, the Sixth Five Year Plan, despite the priority
given to agriculture, does not reflect the guidelines of the Lagos
Plan of Action and APPER. Under the Fifth Plan (1981-85), 23.7
percent of the national budget was earmarked for Agriculture and
Rural Development. This proportion was raised to 26.1 percent in
the Sixth Plan. However, this does not reflect the distortions
among the different programmes. In fact, between 1981 and 1987, an
annual average of 5.44 percent of total investments was allocated
to the agricultural sector.
On the eve of the end of the Sixth Plan, Cameroon agriculture
is still largely dominated by the traditional subsistence sector
characterized by a low level of technology, small-size farms, and
low productivity levels. The total failure of the "beloved" agro-
industries, now being privatized, points out the need for an
effective reorientation of government policies towards peasant
If food self-sufficiency is to be achieved, and sustained, the
problems facing the small farmers need to be tackled. Priority
should be given to research with the final goal of providing small
farmers with an appropriate and low cost technology, and a
technical package suitable to their socioeconomic environment.
The place of agriculture in the Congo economy has remained
very modest. Despite the fact that it employs about 45 percent of
the total active population, its annual average contribution to GDP
is less than 10 percent and it represents less than 2 percent to
total exports. Though three quarters of the cultivated land is
devoted to food crops, total production does not satisfy domestic
The annual average growth rate of food production between 1980
and 1987 was 1.5 percent, and the population growth rate was 3.3
percent. As a result, food imports rose steadily to 97 thousand
metric tons of cereals in 1987 as against 34 in 1974.
The yields of food crops in the Congo have been among the
lowest in sub-sahara Africa: 696 Kg/ha for cereals and 857 kg/ha
for rice as against 856 kg/ha and 1780 kg/ha in the sub-region,
respectively. The overall agricultural production between 1980 and
1986 was stagnant.
Despite this poor performance, the agricultural sector has not
received the attention it should from the Government. An analysis
of the agricultural development programmes since their independence
shows that all efforts and resources in agriculture have been
devoted to export crops and livestock through the creation of the
vast state owned farms, with little or no attention paid to small-
farmer agriculture. The share of the agriculture sector in the
different investment plans has remained less than 7 percent; almost
all devoted to export crops.
In 1978, measures were taken to promote food crop production
with the creation of OCV (Office des Cultures Vivridres) whose
activities included the distribution of seeds and fertilizers and
the marketing of food products. Furthermore, many small regional
projects were created and executed by different agencies to serve
the same group of peasants, but did not involve all the farmers.
The new policy guidelines of the agricultural sector adopted
by the Congolese Government are satisfying actual and future
domestic demand, developing export crops, and valorizing
agricultural products. The measures to be taken include the
improvement of marketing channels, adequate prices, and the
involvement of the urban population in food production. However,
well-defined policy guidelines with clear objectives and goals in
its declared policy to improve food production are lacking.
Under pressure from the World Bank and the International
Monetary Fund, Congo initiated major programmes of structural
adjustments in 1985. The measures adopted include the elaboration
of incentive schemes and, in general, the allocation of more
development funds to the agricultural sector. Measures to be taken
include restructuring the extension service, supplying adequate
farm inputs and credit, intensifying crop protection, and providing
an adequate price policy.
The main conclusion we can draw is that, despite all the
measures recommended and government's statements of intent, the
agricultural sector policy in Congo has been concentrated on
exports crops while small-farmer agriculture has received little or
For many decades, the agricultural sector was largely ignored
by the Gabonese Government because it was believed to be relatively
unimportant to the economy. The sector employs some 63 percent of
the total active population, contributes less than 10 percent of
GDP, and accounts for less than one percent of total exports.
More recently, the agricultural policy of the government has
purported to foster the development of agro-industries, the
transformation of peasant agriculture into modern units of
production, and the improvement of living conditions in rural
The Third Development Plan (1976-80) was the first to give
priority to agriculture. But no specific measures were taken.
Under the Fifth Plan, the main objective was to achieve food self-
sufficiency. However no policy framework was designed to define a
program to achieve such a goal.
Thus in the early -1990s, the agricultural sector in general
and the food sector in particular appear not to be a major concern
of the policy-makers, at least as long as the industrial sector can
finance the increasing food import bill.
Central African Republic
Agriculture is one of the main components of the economy of
the Central African Republic. It accounted for 41 percent of the
GDP and absorbed 62.4 percent of the working population in 1987.
Over the same period, the agricultural share of total exports was
44 percent. Both subsistence farming and cash crop production are
carried out. But until 1980, priority was given to export crops.
It is only with the Fifth Plan (1980-85) that food production
became an area of concern.
Although it does not produce all its food needs, the Central
African Republic has a favorable climate and produces a larger
portion of its needs than do many African countries. Despite a
large decrease in food production in the 1970s, this country has
had an average annual growth rate of food production of 2.4
percent--only slightly below the population growth rate of 2.5. As
with many countries in the sub-region, the obstacles to greater
production include a low level of technology, lack of agricultural
inputs, lack of infrastructure, and a lack of efficient
institutions in the provision of extension service and in price
The present development policy gives priority to the
agricultural sector and has two main objectives in regard to food
production--namely, the promotion of food crop production to
achieve food self-sufficiency, at a targeted growth rate of 2.5
percent, and an increase in incomes and living conditions for
people in rural areas. Specific measures to achieve these
objectives include the planting of potatoes in the upper Sanagha,
planting of onions in the north, and the integrated rural
development project on Gribingui.
Agricultural production has always been the main economic
activity in Equatorial Guinea. This sector has continued to be the
main stay of national economic development and is the major
employer of the country's working population. Its contribution to
the GDP has increased from 41.5 percent in 1981 to 50 percent in
1989. The percentage of the population employed in agriculture has
fallen from 61 in 1985 to 57 in 1989.
Although the index of per capital food production decreased 5.6
percent from 1966 to 1986 and that of agricultural production by
4.7 percent, the domestic food production is enough to satisfy the
basic needs of the population. Food crops are produced by small
farmers--essentially for home consumption.
Cocoa has been a dominant crop. However, production has
fallen from 40,000 metric tons before independence to 7,000 during
the 1985-86 season. Coffee and palm oil are also produced. The
distribution to the natives of farms that formerly belonged to
Europeans has stimulated production.
The ongoing agricultural development programme gives priority
to food self-sufficiency. The objectives are to promote the
rehabilitation of export crops and the intensification of food
crops and livestock production. The main measure taken to achieve
this objective was the organization of peasant cooperatives in 1980
through which the government provides assistance to farmers in the
form of credit, fertilizers, seeds and other inputs for export crop
production. In 1983, this programme was extended to include food
Agriculture is the main economic sector in Chad and its
importance has increased--from 41.6 percent of GDP in 1981 to 46.7
percent in 1989. In 1985, 80 percent of the country's labor was
employed in agriculture. This percentage fell to 76 in 1989.
However, food production is far from satisfactory. Three main
problems are the erratic nature of rainfall, the periodic invasion
of locusts and the persistence of traditional farming systems.
Chemicals, fertilizers, and improved seeds are not generally used.
Although performance in food production differ from one
country to another, the different policies of UDEAC countries have
not lived up to expectations, and the impact of these policies has
been rather insignificant. The agricultural sectors in the sub-
region remain biased against food crops and are dominated by small
farms using traditional methods. The extension and research
services have failed to provide farmers with alternative
technologies to raise total factor productivity.
Differences in the economic structures of the sub-region are
reflected in national policy guidelines elaborated for the
agriculture sector. The equation of cash and food crops determines
to some extent the nature of the objectives to be achieved and the
measures to be taken. These differences in structures and national
perceptions about priorities for food production make it difficult
to define and implement a common programme for action to promote
economic integration within the sub-region.
Inter-Country Cooperation in the Food and Agriculture Sector
The need to establish sub-regional institutions which can help
member states collectively develop the capabilities and
infrastructure essential for their economic and social development
was stressed in the Lagos Plan of Action (LPA). The African Heads
of States committed themselves to "ensure the economic, social and
cultural integration of our contingent." The ultimate objectives
of that commitment were to establish an African Economic Community
and an African Common Market through the strengthening of the
existing regional economic communities, the establishment of
economic groupings in the other regions of Africa, and the
promotion of policy coordination and harmonization.
To date, the achievements of the UDEAC and its three
institutions4 have, in regard to agriculture, been limited to
"l'l6aboration d'etudes, de descriptifs de projects et d la
convocation des conferences." Neither the General Secretariat, nor
the Council of Heads of State have set up or adopted common and
harmonized agricultural policies. Most of the institutions have
remained non-operational because of the lack of financial
4As mentioned earlier these institutions are the Department of
Rural Economy at the General Secretariat of UDEAC, the Conference
of Ministers in charge of Animal Husbandry, and the Permanent
Commission for Agriculture.
resources, and also because the member states have not respected
the commitments they made in the 1974 Treaty.
The first obstacle to inter-country cooperation within the
UDEAC sub-region has been the inability of the different
institutions to design agricultural policies common to member
states. This failure is revealed by the disparities of national
policies which are in turn due to differences in the structures of
production and in the levels of development among countries. The
dual nature of Central African agriculture, inevitably leads to a
conflict of interests when its comes to defining a common framework
for agricultural policy.5
Another obstacle is multiple memberships of UDEAC states in
sub-regional groupings in Central Africa. The "obligations which
member states have either individually or collectively assumed
under the different treaties and protocol agreements establishing
the groupings" are sometimes difficult, if not impossible to
respect. A final obstacle is the overlapping of policies and
activities which result in an inefficient use of scarce resources.
In fact, in the UDEAC, no attempt was made to clearly define its
domain of competence and priority zones for cooperation, and its
relations with the other existing groupings, such as the Lake Chad
Basin Commission and the Economic Community of Central African
Although the UDEAC states are part of the process for the
implementation of the Lagos Plan of Action (LPA), they have failed
collectively to translate the broad principles of the Plan into
practical sets of activities for implementation. This is due in
part to the differences between the provisions of UDEAC Treaty and
those of the LPA. For example, UDEAC acts to promote regional
trade and industrialization while the provisions of LPA go further
to point out the measures which can improve and make possible the
realization of certain goals--notably food self-sufficiency.
The provisions of the UDEAC Treaty do not reflect the
philosophy and principles underlying the LPA as accepted by all
member states. Therefore, the Treaty needs to be revised to
reflect the essential objectives of the LPA. This is perhaps the
first step to defining a common and homogeneous framework for sub-
regional cooperation and integration not only in the food and
agriculture sector but also in other sectors of the economies of
5For example, among the UDEAC member states, Cameroon has
developed very diversified agricultural and agro-industrial
structures which are all relatively dynamic and mostly devoted to
export crops. Since food self-sufficiency is the main objective of
UDEAC agricultural policy, one should perhaps not expect Cameroon
to favor food production at the expense of export crops--especially
since it enjoys relative food self-sufficiency
Some Strategic Areas for Sub-Regional Cooperation
in the Food and Agriculture Sector
The analyses by countries in the second section of this paper
showed that the sub-region is characterized by low levels of
productivity, a persistence of traditional farming methods, a low
level of trade between countries, and rapid population growth
rates. However, the magnitude of these problems vary from one
country or area to another. Some countries rely heavily on food
aid. Others enjoy relative food self-sufficiency. Some countries
have an agricultural sector which uses more modern inputs and
advanced technology, others are far behind. The differences in the
level of technology and food productivity suggest that there is
ground for cooperation in the sub-region so as to allow each
country to benefit from the "know-how" of the other.
The following activities are suggested as possible priority
areas for cooperation--agricultural research, production of
improved varieties of seeds and other materials to increase the
productivity of food crops, production of fertilizers and
chemicals, fabrication of agricultural tools and machines, and the
processing and marketing of food products.
Research is needed to provide reliable knowledge in nearly
every dimension of UDEACs programme. However, the current food
situation in each of the member countries suggest that priority be
given to joint research on the basic food crops. Programmes are
needed to improve the production, processing and distribution of
roots, tubers, and plantains, cereals, fruits, vegetables, and
legumes. Research on preventing losses remains important and
overlaps storage and processing of food products. Measures are
needed to promote cooperation between national and sub-regional
research institutes to facilitate and coordinate the diffusion and
utilization of results from research.
A preliminary study is needed on the organization of the
production, multiplication and distribution of seeds of the basic
crops in the member states. The central core of such a study
should be to:
1) examine and assess the capability of existing research
institutions with a special emphasis on research centers more
involved in food production;
2) study and assess at the national and sub-regional level,
the achievements in terms of production and multiplication of
plants and seeds;
3) identify and assist ongoing programmes able to rapidly
promote the improvement of the quality of seeds already
4) prepare recommendations and documents to design a global
seed programme for the member states; and
5) estimate the financial and human resources available and
budget needs to develop and maintain a sub-regional seed plan.
Each country should specialized in the production of seeds for
crops most suitable to its ecology.
The following repartition is recommended: Congo and Gabon for
roots, tubers and plantains; Cameroon, Chad and Central African
Republic for cereals; and Equatorial Guinea and Cameroon for
Fertilizers and chemicals are imported and under used because
most countries do not have enough resources to finance these
imports. Where inputs are available, most of them, if not all, are
used on export crops. Promotion of the use of fertilizers and
chemicals should be given priority in the quest to achieve food
self-sufficiency. Member states should also cooperate to study the
feasibility of producing fertilizers and chemicals in the sub-
region and exchange data on how to efficiently and rationally use
fertilizers and chemicals.
Tools and Mechanical Technology
Food crops production by traditional methods is essentially
hand work. However, some countries like Cameroon have the ability
to fabricate small tools as well as centers of agricultural
mechanization. But their level of production is far below the
needs of the sub-region. In order to reinforce the capacity of
production of those units and centers, it is important to study
their problems, the needs of UDEAC member states, and possibilities
for specialization among existing firms. Some could be specialized
in the production of simple technology tools while others could
experiment with greater degrees of agricultural mechanization
taking into consideration the nature of soils and other elements of
the ecological systems.
UDEAC member states should cooperatively promote inter-state
trade in food products in order to strengthen existing marketing
channels which in many areas are quite informal and to work toward
the development of a more modern system for trade in food items.
A first step to promote inter-country cooperation in the sub-
region, therefore, is to formalize the informal marketing channels
already existing so that surplus production in any area can move to
where there is an effective demand.
Furthermore, it is important to accelerate the adoption of a
common list of food products which would not be subject to any
tariffs or other trade barriers. Related measures include the
improvement of transportation facilities, roads, and marketing
infrastructures--including storage facilities and the organization
The processing of agricultural products is part of the
solution of the food problem in the sub-region. The promotion of
processing techniques and their adoption are needed at the national
and sub-regional level. A center of agro-industry technology with
research and training components should be set up at the sub-
regional level to encourage and speed the development of processing
activities of appropriate size.
In this domain of the processing and valorization of
agricultural products, new uses of some food crops should be
explored and developed if the evidence suggested feasibility--for
examples, flour from cassava and sorghum and the manufacturing of
animal feeds from maize, sorghum, cassava and other roots and
In conclusion, the UDEAC member countries have a long way to
go to fully understand the importance, issues, problems and the
need for sub-regional cooperation in the area of food and
agricultural production. To be successful, a greater political
will and a more concerted efforts will be required than have
existed up to now.
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Note de Potentialites des Etats Membres de la CEEAC, VIe
Session odinaire de la Commission Consultative. Bangui,
Central African Republic, 1989.
Rappport sur la Premi6re Etape de la Mise en Place de la
Communaut6. Rapport present& a la Ve Session ordinaire de la
conference des Chefs d'Etats et de Governement. Bangui,
Central African Republic, 1989.
United Nations Economic Commission for Africa (ECA or CEA). Cadre
Africain de Rf6erence pour les Programmes d'Ajustement
Structurel en vue du Redressement et la Transformation Socio-
Economique. Addis Abada: UNECA,1989.
la CEA et le Developpement de l'Afrique 1983-2008: Etude
Prospective Pr6lininaire. Addis Ababa, 1983.
ECA Report of African Economic Association Inaugural
Conference and Scientific Colloquium. Addis Ababa, 1990.
SMission d'Evaluation de l'UDEAC. Rome, 1985.
S Survey of Economic and Social Conditions in Africa.
Food and Agricultural Organization of the United Nations (FAO).
African Agriculture: The Next 25 Years. Rome, 1986.
SFAO Fertilizers Yearbook 1985. Rome, 1985.
SFAO Production Yearbook 1985. Rome, 1985.
Maboundou, Rigobert. "Essai d'Interpr6tation de la Marginalisation
de l'Agriculture Paysanne dans le Pays de 1'UDEAC", paper
present& au Seminaire International sur l'Integration et la
Cooperation Economique en Afrique Centrale. Brazzavile,
Mafeje, Archie. "African Agriculture: The Next 25 Years--Old
Problems, Old Solutions and Scientific Fables," Africa
Mwaziby, Okingoba. "Etude Comparative des Politiques Agricoles de
Pays Membres de 1'UDEAC dans la Perspective de l'Integration
Economique en Afrique Centrale." Papier pr6sente au Seminaire
International sur l'Integration et la Coopertion Economique en
Afrique Centrale. Brazzaville, Congo, 1984.
Ndongko, W.A. Central African Customs and Economic Union:
Evolution, Performance and Prospects. MESRES/ISH, 1988.
S"The Impact of Lagos Plan of Action (LPA), Final Act of
Lagos (FAL) and OAU's African Priority Programme for Economic
Recovery (APPER) on Africa's Large-Term Development." Paper
presented for the OAU Seminar on the LPA, FAL and APPER.
Kigali, Rwanda, 1989.
Organization of African Unity (OAU). Africa's Priority Programme
for Economic Recovery, 1986-1990. Addis Ababa, 1986.
Food Self-Sufficiency, Technological Autonomy and Social
Progress in Africa, Research Guide, International Institution
for Labour Studies, Geneva, 1984.
SThe Lagos Plan of Action. Addis Ababa.
What Kind of Africa by Year 2000? Final Report of the
Monrovia Symposium on the Future Development Prospects of
African Towards the Year 2000.
Tibana, Roberto. "Agricultural Policy and Development Africa and
Country Lessons and a Look into the 1990s." Paper presented
at the Inaugural Meeting of the Eastern and Southern Africa
Economist Association, Nairobi, 1990.
Union Douaniere et Economique de 1' Afrique Centrale (UDEAC).
Propositions d'une Nouvelle Strat6qie d'Integration Economique
ou Sociale de 1'UDEAC, 1988.
World Bank (The). World Development Report 1989. Oxford: Oxford
University Press for The World Bank, 1989.
Nkwain Sama Joseph'
I agree with Dr. Ndongko that the food situation in the UDEAC
sub-region and of the Sub-Saharan region of Africa as a whole, is
alarming. The 1990 World Development Report also supports this
claim. The report projects that the number of poor people in the
sub-saharan region will increase from 180 million in 1985 to 265
million in the year 2000. For the UDEAC sub-region, the report
reveals that the average index of food production per inhabitant
has remained below 100--the index for the 1979-81 base period.
Although UDEAC States already have food self-sufficiency as
the corner stone objective of their economic development, the food
situation calls for much more attention. It calls for revision of
strategies, reorientation of priorities and policies, and the
creation of conducive conditions and environment for the
formulation and implementation of appropriate policies. Such
measures should ensure food self-sufficiency not as an end in its
self but as an important means to guarantee food security in the
Dr. Ndongko has recognized the fact of institutional failure
and the urgent need for reformation and for governments to create
appropriate institutions and conditions that would make such
institutions workable. He has presented arguments to explain
institutional failures and the absence of cooperation and has also
identified some constraints to the realization of policies and
other measures approved for the sub-region. But one major fact
seems either to have been overlooked or to have been alluded to
only indirectly. It is the fact that inappropriate structures and
malfunctioning of government bureaucracies in these and most other
African states are a major source of inappropriate institutions and
of institutional malfunctioning in the sub-region. Such
bureaucracies are characterized by top-down heavily centralized
structures in which appointments into policy making positions is
dictated by political patronage. This, as Loveman puts it, merely
makes public officials concessionaires as it leaves them with too
much discretional powers. These characteristics I believe, have
negative influences on the quality and attitudes of the principal
actors in the policy formulation and implementation processes.
Priority setting and the quality of the key institutions that
direct State affairs are also adversely affected. As a
consequence, the performance of the institutions and of the policy
'Assistant Professor in the Department of Agricultural
Economics, University Center of Dschang, Cameroon.
makers is jeopardized especially as continuity is not guaranteed by
The factors Dr. Ndongko has given to explain the absence of
inter-country cooperation in the agricultural sector of the sub-
region are also a consequence of the structure and mode of
operation of the respective government bureaucracies. For example,
the late recognition of the necessity for cooperation in the
agricultural sector, the inability to conceive and adopt common
agricultural policies, and the inability to respect inter-state
engagements could be argued to be directly linked to the structure
and functioning of government bureaucracies. Therefore, more open,
rational, objective and less discretional bureaucracies seem a
prerequisite for better institutions and policies and for
cooperation towards progress in the sub-region.
Dr. Ndongko has identified three broad areas--agricultural
research, appropriate technology, and marketing for possible sub-
regional cooperation. Further discussion on the issues raised
should contribute useful ideas for the development of the sub-
region's agricultural sector in general and the food sub-sector in
particular. The areas identified have promising potentials for
cooperation, policy, and promotion of food production and
distribution in the sub-region. The areas of discussion should
i) investments to improve agricultural research and inter-
state cooperation in such research,
ii) investments to improve inter- and intra-state food
iii) measures to improve human capital formation to ensure the
development of new and improved technologies and institutions,
iv) how best to exploit complementarities in directing aid to
assist efforts to assure food self-sufficiency.
Mellor et al identified data collection, information analysis,
and research as critical areas for improved food policy in Sub-
Saharan Africa. Most of Dr. Ndongko's suggestions on research are
in line with recommendations made by these authors. However, UDEAC
member countries should also cooperate in building capacity in data
collection and in developing capacity for analyzing existing
knowledge into a logical basis for decision making.
Other noteworthy actions envisaged by Dr. Ndongko are the
creation of a sub-regional seed production plan and the need to
confer on some better-placed-member states the task of specializing
in the production of crops for which they have comparative
advantage. These proposals apply only to crop production and
nothing has been proposed for the improvement of livestock
production thus giving the impression that Dr. Ndongko's concern is
only for the improvement of crop production and particularly food
crop production. Food crops, cash crops, and livestock production
need to enter the calculus if food security is to be attained. It
must also be recognized that the overall socio-economic development
of each member state and of the entire sub-region is a sure way of
resolving the food security problem. Improvement in cash crop
production is important because cash crops provide a long-term
source of revenue for the development of the needed infrastructure
and for ensuring effective demand for supplementary food supplies
from local and external markets.
The capital to finance inter-state projects in the sub-region
is also a known and crucial constraint. Scarce financial, human and
natural resources can be efficiently allocated if and only if
comparative advantages are exploited. It is also necessary to
concentrate on the development and improvement of communication
facilities and infrastructure to enhance links and free circulation
among the member states.
Nevertheless, only the good will and effective actions of the
governments and concerned donors will bring about the effective
institutions and sound policies needed for food security in the
Loveman Brian The Logic of Political Corruption California
State University, San Diego, (undated paper).
Mellor, John W., Christopher Delgado, and Malcolm J. Blackie, eds.
Accelerating Food Production in Sub-Saharan Africa.
Baltimore: The Johns Hopkins University Press for the
International Food Policy Research Institute, 1987.
World Bank (The). World Development Report 1990. Oxford: Oxford
University Press, 1990.
POLICY CHOICES FOR AFRICAN AGRICULTURE:
AN ALTERNATIVE FRAMEWORK
This paper examines the role of the international financial
institutions in the formulation of African macro-economic policies
with particular reference to efforts aimed at adjusting the
agricultural sectors of African economies. The paper attempts to
assess the impact of structural adjustment programmes (SAPs) on
African agriculture, and through an examination of the application
of the programmes in three African countries--Malawi, Tanzania and
Zambia, to draw lessons that may be useful for future efforts aimed
at developing the continent's agriculture. The paper concludes
that many orthodox SAPs have failed to achieve their intended
objectives because they have not been able to adapt to the African
situation. Furthermore, by concentrating almost exclusively on the
attainment of internal and external financial balances at the
expense of the development of the basic structural factors that are
important for both economic growth and socio-economic
transformation, these programmes only succeed in reproducing the
continents poverty and vulnerability. The paper concludes that for
orthodox stabilization and adjustment programmes to be effective,
they must be designed in a generalized framework of structural
During the 1960's when the struggle by many nationalists
movements in Africa began to pay off in the form of political
independence from European colonial rule, the continent was gripped
by an expectation that the political liberation of African
countries would lead, in no time, to the continent's social,
economic, and cultural transformation. The new leadership was
expected to successfully develop a new political order around a
ISenior Regional Adviser in Food and Agricultural Policy and
Planning, United Nations Economic Commission for Africa (UNECA),
Addis Ababa, Ethiopia. Paper presented at the Agricultural Policy
Analysis Symposium, University Center of Dschang, Dschang,
Cameroon, November 3 to 6, 1991. The views expressed in this paper
are those of the author and do not necessarily represent those of
strong nationalist party and a symbolic national hero and to
successfully guide their economies through a process of sustained
It is interesting to note that most African Governments
followed a strategy of development that could be labelled
capitalist in the years following independence (Stryker). This
strategy was an inevitable continuity with colonial policies and it
gave top priority to international cooperation, investment, and
trade ties with the Western capitalist world. The aim was to
"release" the presumed stimulating effects of foreign capital,
technology, manpower, and consumer goods on rapid economic growth
Countries that chose to pursue the spirit of this strategy
were guided an supported by a number of western international
financial institutions such as the International Monetary Fund (IMF
or Fund) and The World Bank. However, by the 1970's many African
countries had started to show signs of economic decay and
stagnation. The inadequate infrastructures and fragile
institutions inherited from the colonial powers began to crumble in
the face of development projects that required large numbers of
trained personnel, complex public institutions, efficient
infrastructures, and rising recurrent expenditures from the
This deteriorating situation in the economic fortunes of the
continent only a few years after independence prompted the more
radical students of African economic thought to start questioning
the accomplishment of African political independence and the
effectiveness of the capitalist strategy, in its various African
forms, to cope with the internal and external problems of continued
African underdevelopment (Dumont). These students argue that
African underdevelopment is part of the same historical process by
which capitalism developed in the "mother countries" and that the
process involved stretches from the 16th to the 20th centuries.
For example, Amin reported that during the slave trade era there
was a positive link between the industrial economies of the
European metropolis and African slave trade, and that Africa's
usefulness to the domestic economies of Europe was mainly in the
form of the economic gains accruable from the slave trade as a
result of the forced use of African labour in European mines and
plantations. This linkages is said to have resulted in efforts to
expand total primary production in African countries to feed
European industries. Wallerstein reported that this expansion was
mainly into areas of primary production because this area involved
windfall profits from labour and land priced below world market
rates. This, in turn, led to labour shortages within the world
economy which, in turn, led to the need for more slaves.
The colonial period which followed the "scramble" for Africa
was characterized by unequal exchange relationships between the
colonizing powers supplying manufactured goods to Africa and the
colonized Africans supplying cheap food and raw materials to the
mother countries. This period also marked the beginning of the
installation of a network of different forms of controls on African
economies by the colonial masters in favor of their economies as a
means of guaranteeing the development of European economies.
Frobel et al reported that the development and perpetuation of
these controls made possible a considerable greater transfer of
labour out of agriculture and into the industrial sector (within
the developed countries) than the rise in agricultural productivity
would have otherwise permitted. This of course, contrasted with
the conditions that emerged in many African countries with
economies dominated by export oriented agricultural and mineral
production sectors developing independently and as part of an
integrated world market economy but horizontally non-integrated in
their own national economies.
International Financial Institutions and the
Formulation of African Macro-Economic Policies
By the early 1980 an economic and financial crisis had
engulfed the African continent and those countries who had chosen,
since independence, to adopt an essentially capitalist strategy
were not spared. This created a lot of concern among the officials
of both the IMF and The World Bank which in turn prompted a special
study on the economic development problems of countries in Africa
and an appropriate programme for helping them. The report (World
Bank) concluded that the crisis arose basically from domestic
policy deficiencies in the post-independence period and recommended
that these policies must be changed if African countries were to
lift themselves out of the crisis.
This prognosis is in line with the traditional position of IMF
and The World Bank concerning the need to maintain internal and
external balances through the adoption of stabilization and
adjustment programmes. The aims of the Fund's support for
adjustment programmes are prescribed by its Articles of Agreement.
These call for the expansion and balanced growth of world trade as
a means toward the promotion and maintenance of high employment and
real income levels as well as toward the development of the
productive resources of member countries. The Fund seeks to
fulfill this aim by fostering economic and financial cooperation
among member countries in a setting of exchange stability and
orderly exchange arrangements, and in the context of a liberal
system of multilateral payments. To this end, it makes resources
available to members in support of their efforts to correct
maladjustments in their balance of payments. This provides the
institutions with a leverage which is applied to African economies
mostly through conditionalities. These conditionalities define the
rules and regulations, generally, relating to macro-economic
policies, which countries have to abide by in order to qualify for
financial assistance from these institutions.
Conditionality was formally incorporated into the Articles of
Agreement of the IMF in 1969. Today, conditionality has become the
dominant factor in the adjustment and stabilization programmes of
about two-thirds of the countries in Sub-Saharan Africa. "Cross
conditionality" is also widely used. Cross conditionality occurs
when lending from The World Bank and other financial groupings such
as the Paris and London clubs is conditional on the borrowing
country first reaching an agreement with the IMF.
The advent and growing importance of cross conditionalities
demonstrates the strength of the international financial network to
exert overt pressures on African economies. The importance of
conditionalities is an inevitable outcome of the 1944 Bretton Woods
meeting during which John Meynard Keynes, in order to establish a
link between the IMF and The World Bank, argued that "the Board of
the Fund should be composed of cautious bankers and that of the
Bank of imaginative expansionists" (Killick, 1987). Today, most
IMF and World Bank programmes in Africa seem to be guided by these
The philosophy of a marriage between cautious banking and
imaginative expansionism was given momentum in 1974 with the
introduction of the Extended Fund Facilities (promoted by an
African member of the Executive Board) and again in 1979 when
structural adjustment loans (SAL) and other forms of policy related
lending were introduced. Killick (1984), reports that this move
was intended to establish conversion between the two institutions
in order to fill the gap between short-term balance of payment
support by the Fund and medium- and long-term project lending by
the Bank. The effect of the trend towards convergence of the two
institutions has been a movement of the Bank into policy related
lending through the SALs and sectoral loans which carry similar
conditions while the Fund has increasingly added supply side to the
conventional demand side conditionality. As a result, macro-
economic policies in African countries have come to be strongly
influenced by both the IMF and World Bank policies.
This influence started as far back as the 1970's when an
increasing number of African countries began to put in place
stabilization programmes and, from 1980, structural adjustment
programmes (SAPs). Between 1980 and 1988, thirty three African
countries had standby arrangement facilities and twelve had
extended fund facilities from the IMF, and fifteen had structural
adjustment loans from the World Bank (ECA).
Structural Adjustment and African Agriculture
Because the agricultural sector usually plays the most
important role in most African economies in terms of employment,
gross domestic product (GDP), exports, imports, inputs for industry
and as an important source of revenue for the government budget, it
has usually featured prominently in both IMF- and Bank-funded
Structural Adjustment Programmes. These programmes are usually
supported by the Fund's stand-by arrangements and the Bank's
sector-based loan programmes (SECAL).
The analytical framework within which the agricultural sector
is considered in these programmes has been outlined by Johnson.
The framework lays emphasis on the internal terms of trade of
agriculture and the supply response of producers in the
The model considers the agricultural sector as a set of
producing and consuming households with a balance sheet such that
the sum of total value of produce of agricultural households,
income obtained by working in the non-agricultural sector,and non-
labour and non-agricultural income received are equal to the sum of
expenditures on non-agricultural commodities, non-family labour,
physical variable inputs, physical assets, the value of consumption
of their own output, and accumulation of bank assets through
savings. The model is often operationalized by attempting to
manipulate a wide range of variables that are hypothesized to
affect agricultural output.
The Impact of Structural Adjustment Programmes
on African Agriculture
It is now generally accepted that because agriculture is the
"prime mover" in most African economies, recovery from their
present economic crises will have to originate from that sector.
The Fund and the Bank also believe that agricultural polices and
institutions in Africa have played an important role in creating
the balance of payments, growth, and inflationary problems that
have resulted in the external and internal imbalances, SAPs are
designed to tackle. Hence, agriculture is prominent in most
African SAPs. This prominence is predicated on the assumption that
if SAPs favourably impact on African agriculture, they are bound to
rebound beneficially on almost all the desirable outcomes of
economic adjustment enumerated above.
Since 1980, various African countries have adopted Fund and
Bank reform measures. It is, however, difficult to asses the
impact of these programmes on African agriculture for a variety of
reasons. Firstly, for a number of the adopting countries, the
limited duration of the programmes makes an assessment of their
impact difficult. Secondly, differences in the magnitudes of the
initial disequilibria which the reform measures were designed to
eliminate and unevenness in the implementation of prescribed reform
measures further obscure any assessment of this impact. An
interesting question, however, relates to weather or not, in terms
of overall economic performance, African countries that have been
more religious in adopting prescribed reform measures have
performed any better than those who have been less enthusiastic or
have not bothered to adopt even if considered to need reform
Figure 1 provides data for the growth of GDP at constant 1980
prices for the period of 1980 to 1987 for all African countries
grouped, relative to their 1986 position as follows:
1. Countries with strong adjustment programmes: Burundi,
Central African Republic, Congo, C6te d'Ivoire, Gambia, Ghana,
Guinea-Bissau, Kenya, Madagascar, Malawi, Mauritania,
Mauritius, Niger, Nigeria, Senegal, Tanzania, Togo, and Zaire.
2. Countries with weak structural adjustment programmes:
Benin, Burkina Faso, Comoros, Equatorial Guinea, Ethiopia,
Liberia, Mali, Sierra Leone, Somalia, Sudan, Zambia, and
3. Non-adjusting countries: Angola, Botswana, Cameroon, Cape
Verde, Chad, Djibouti, Gabon, Lesotho, Mozambique, Rwanda, Sao
Tome and Principe, Seychelles, Swaziland, and Uganda.
4. North African countries: Algeria, Egypt, Libya, Morocco,
The figure shows that for the first group of countries--those
with strong structural adjustment programmes--the average annual
growth rate of GDP was about 1.5 percent during the period 1980-
1987 with a slightly increasing trend. In these countries, the
growth varied considerably from year to year, registering a
negative rate of nearly 8 percent in 1980-81, an improvement in
1981-82, a significant decline through 1983-84, a recovery in 1984-
85, then another significant decline through 1986-87.
The weak adjusting countries achieved an overall average
growth rate of 1.2 percent with a slightly decreasing trend during
the period. Non-adjusting countries averaged 3.1 percent with
somewhat less of a decreasing trend, and the North Africa countries
achieved an average annual growth rate of 1.5 percent with a very
slightly increasing trend during the period. All three groups of
countries also had varying annual GDP growth rates during the
period 1980-1982. However, in contrast to the group of strong-
adjusting countries, the North African countries registered had
negative growth at the beginning of the period, but no interim
years of negative growth rates; weak-adjusting had two years of
slight negative growth, 1983-84 and 1985-86; and non-adjusting
countries only registered one period, 1986-1987.
The overall annual growth rate of GDP for Africa as a whole
was a relatively low 0.4 percent during the period, largely
influenced by the poor performance of countries with strong
Figure 2 provides additional evidence to compliment the above
analysis. The figure suggests that sub-saharan African countries
implementing structural adjustment programmes experienced after
adoption of SAPs: a decline in the investment/GDP ratio from 20.6
percent to 17.1 percent; GDP growth decline from 2.7 percent to 1.8
percent; a rise in the budget deficit from -6.5 percent to -7.5
percent of GDP; and, a rise in the debt service/export earning
ration from 17.5 percent of 23.4 percent. The figure also shows
that there has been only a minor improvement in the current
account/GDP ratio from -9.4 percent to -6.5 percent.
-- I 47
"4 / / ___-
.---- Strong Adjustinig
/ - Welk Adjuslinc
.H ***** North Africa'
.- Total ,Africa
l190n-l19I 19lI-1,: lN;-l9. 19Kj-14n J 194-INs 5 19K5-I91N6h 19X6-19H7
Figure 1. Percentage Growth in Gross Domestic Product" in
Specified Groupings of Africa Countries by Years,
1980-81 through 1986-87.
in constant 1980 U.S. dollars for market prices.
Intetmentl \nnual Ituduet Current Ieht Prialte
(;I)p G deficil/ crriount/ er irer/ crnumplioin
growth )1' (;I)P Eipor% per capilu
Figure 2. Indicators of the Sustainability of Adjustment for
Sub-Saharan Countries Implementing Bank/Fund
Source: World Bank, 1988.
The evidence has led many concerned organizations and
individuals to conclude that, on the whole, the Fund and Bank
supported SAP's have not succeeded in reducing the adverse
consequences of the African economic crisis and that the
continent's poverty and vulnerability persist. Even the Bank and
the Fund are now acknowledging some of the short-comings of earlier
adjustment programmes and recognizing the need to modify or change
past policies in the face of a changed external environment. As a
consequence, the new-found interest of the institutions is in
"adjustment with growth (Ravenhill)."
However, while it is now obvious that a continuation of
previous policy reforms measures unchanged or unmodified is no
longer tenable given the limited impact of past SAP's, simply
comparing and contrasting the performance of African economies with
strong, weak, or non-adjusting programmes only provide a diffuse
and ambiguous set of prognoses and experiences. There is,
therefore, need for a more careful analysis of what lessons can be
learned from the first generation of SAP's as a basis for making
recommendations for modifications or alternatives for future
In the rest of this section, we review the impact of SAP on
the agriculture of selected African countries and then attempt to
draw lessons for the adjustment and transformation of agriculture
in Africa. Malawi has been chosen because its structural
adjustment efforts are considered as strong by the Bank and the
Fund. The experiences of Zambia and Tanzania are also reviewed,
the former because, like several African countries, its economy
depends heavily on mineral resources, and the later because it is
considered to have pursued a weak structural adjustment programme.
Some African Experiences with SAP
Malawi.--Following independence in 1964, the Malawian economy
performed relatively well until the late 1970's when the economy
started entering into disequilibria on a number of fronts, brought
about largely by a series of external shocks--deteriorating terms
of trade, external transportation dislocations (due to the closure
of the rail routes through the Mozambican ports of Nacala and
Beira), drought conditions in 1980, and deteriorating institutions
and inadequate economic policies. Combined, these shocks resulted
in sustained depressed growth, increased debt and debt-service
burdens, and a balance of payments disequilibrium.
The government responded to this situation in 1980-1981 by
implementing a broad-based adjustment programme designed to restore
macro-economic stability and to remove structural constraints in
the economy. The programme involved structural adjustment measures
supported by structural adjustment loans (SALs) from the Bank and
stabilization measures supported by successive stand-by
In mid-1982 a second SAP was put into motion which laid more
emphasis on the implementation aspects of the component parts of
the first programme with particular attention being placed on
agricultural policy, price incentives and incomes, resource
mobilization and management, and the improvement of economic
institutions. A third SAP was initiated towards the end of 1985.
It was essentially a follow up of the first and second programmes
and was meant to consolidate the policy reforms and measures
initiated under them.
A recent review of the application of both types of programmes
in Malawi (Mapondo) concluded that the Government of Malawi's
effort to stabilize its economy has not met with much success. On
the whole, the terms of trade fell more than programmed and export
volumes also declined. Other indications that the government's
efforts at stabilization have not been very successful include
continuing sharp increases in the current account deficit,
worsening foreign exchange reserve position, declining government
revenues in the face of rising government expenditures, and
The conclusion is that the application of the stabilization
measures in Malawi did very little to remove the shocks
(transportation difficulties, unfavourable terms of trade, and
external debt problems) as intended. Under such circumstances the
continued belt-tightening only resulted in serious-social costs to
the more disadvantaged groups in the country.
The structural adjustment measures in the agricultural sector
were also not very effective. While in the beginning the price
incentives granted to small-scale farmers were influential in
raising smallholder output and in signalling to them the mix of
crops preferred by the Government, the overall impact was limited
because agricultural productivity was not increasing fast enough.
The programme to remove subsidies on smallholder fertilizer also,
over time, limited the effectiveness of the agricultural policy
reform measures since the increased output prices were not
sufficiently high to offset the increased costs of fertilizer. The
programmes also failed to achieve the objective of diversifying
export crops production. The main reason being the lack of
productivity gains in the growing of alternative crops, especially
The overall conclusion is that the programmes have not worked
very well and, in most cases, have had serious adverse effects on
the most vulnerable groups in the country. The pricing measures
failed to achieve their intended objectives and may have even
contributed to increased food insecurity for the households with
small land holdings or those with low incomes. Some of the reform
measures, such as the price decontrol programmes, adversely
affected the well being of the rural population because the private
sector tended to capitalize on the situation by increasing prices
at will (Mapondo).
Tanzania.--Tanzania's economic crisis started in earnest in the
early 1970s and was brought about by rapid expansion in net
domestic credit to the State Trading Corporation through a liberal
external trading policy. The crisis was worsen by drought and the
first oil shock of 1973. Additional adverse factors such as the
war with Idi Amin in 1978, the second oil shock of 1979, the
drought of 1979/80 and a severe decline in the terms of trade which
started in 1978, contributed to the deepening of the crisis. The
net result was severe economic dislocations resulting in excessive
pressure on government budgets, binding foreign exchange
constraints, high inflation rates, and declines in output in almost
all sectors of the economy.
The government began responding to these adverse conditions in
1979 by initiating a number of measures--the Financial Programme of
1979 which was supported by a first credit tranche purchase from
the Fund and loan from the Trust Fund; the Fund's Standby Agreement
of 1980 which had to be abandoned after the first quarter following
failure to meet credit ceilings; the National Economic Survival
Programme of 1981 which focused on crisis management of the
external sector imbalance; and the SAP covering the period 1982/85
which was an independent effort to address the key imbalances
related to the economic crisis.
The SAP was a locally designed programme with a macro-economic
objective of eliminating imbalances in the economy by implementing
policies that would increase output rather than decrease incomes.
The provision of basic needs was not to be abandoned nor was there
to be a deterioration in the distribution of incomes. The
programme included most of the ingredients of an orthodox Fund
supported SAP except that it did not depend on the use of the price
system to correct for resource misallocaiton in the economy.
Consequently, the Fund and the Bank felt that it did not go far
enough and refused to support it. Without the support of external
resources, the programme could not be effectively implemented.
Following negotiations in early 1986, the Government in close
cooperation with the Bank embarked on the most recent and far
reaching effort to stem the crisis. The result was an Economic
Recovery Programme (ERP) which represented an intensification and
continuation of the policy measures of the previous SAP.
A recent case study of the application of SAP in Tanzania
(Lyakura), suggests that the impact of the ERP on the Tanzanian
economy has been mixed. Gross Domestic Product (GDP) increased, in
real terms, by 3.6 percent in 1986 and by 3.9 percent in 1987
brought about mainly by increases in the directly productive
sectors especially agriculture (4.4 percent), manufacture (7.5 per
cent), and energy and water (7.5 percent). The recovery of the
country's agricultural sector was due to good weather conditions,
timely and increased availability of agricultural inputs, better
price incentives, and the availability of incentive goods arising
from the trade liberalization measures taken.
There were however a number of problem areas. Agricultural
infrastructures and facilities were not significantly improved by
the programme, and the marketing system remained quite inefficient.
For example, the marketing system was incapable of coping with
larger than expected increases in agricultural output especially
food and cotton production. Difficulties in processing,
transportation, and marketing all combined to lead to a build up of
stocks by cooperatives and marketing boards. A sharp decline in
the export price of cotton did not help matters.
The ERP does not appear to have made any impact on the
country's balance of payments position. The overall balance of
payments deficit in domestic currency increased by over 80 percent
between 1985 and 1986 and more than doubled between 1986 and 1987.
This sharp deterioration was largely due to the fall in export
commodity prices--particularly for cotton and coffee which fell by
20 and 40 percent, respectively--and to increases in the prices of
crucial imports--particularly oil and fertilizers. The
deteriorating balance of payments position did not help the
country's burdensome external debt problem which also deteriorated
One of the crucial constraint that faced the implementation of
the ERP in Tanzania was the non-availability of sufficient external
funds to support the objectives of the programme. A total of about
US$354 million was earmarked for the programme by the Fund, the
Bank, and joint financing arrangements. However, only US$169
million was disbursed by June, 1988, principally because of non-
fulfillment of the performance criteria and other disbursement
delays. These dislocations in the projected and anticipated
inflows of foreign resources affected the performance of the ERP
particularly in the areas of physical and social infrastructure and
in the maintenance of social services, especially health and
Zambia--The Zambian economy has historically been founded on the
export of copper. From independence until 1975, Zambia had one of
the most prosperous economies in Sub-Saharan Africa. However, when
world copper prices began to crumble in 1975, the Zambian economy
slumped and the results were dramatic increases in budget deficits,
balance of payments deficits, and debt commitments.
The Government responded to the situation by negotiating a
standby arrangement with the IMF in 1978 for SDR 200 million. The
arrangement called for the implementation of most of the Funds'
usual conditionalities including a 10 percent devaluation of the
Kwacha, limiting deficit financing, reducing payments areas, and
instituting wage freezes. When the situation did not improve,
another Fund supported programme was put into motion in 1981 which
attempted to intensify some of the measures adopted in 1978. These
measures included complete decontrol of prices and a devaluation of
the Kwacha by 40 percent. These measures again failed to address
the main disequilibria in the economy. The balance of payments
position worsened and the foreign debt servicing increased to 47.6
percent of export earnings. To remedy this situation the
government, in 1982, embarked on a series of measures to
restructure and transform the economy from one based primarily on
administrative controls to one that would rely more on free market
forces and the price mechanism. These measures, which involved
reforms in the exchange rate system, the interest rate regime,
price decontrol, the tariff system, and production for export were
seen as a comprehensive package deal needed to overhaul the
economic system of the country.
The violent social upheaval that occurred in the copperbelt of
the country in December 1986 following a 100 percent increase in
the price of mealiee" meal provides graphic testimony of the
people's reaction to the austerity measures contained in the reform
programme. A review of the impact of the programme (Seshamani)
reveals that the worst impacts of its policy reform measures were
on poverty and income distribution. Little surprise, therefore,
when in May 1987, the President announced Zambia's break with the
programme. The following excerpt from his address on the reason
for the country's break with IMF provides a good indication of the
country's perception of the impact of the programme:
The International Monetary Fund conditionality has meant
that the restructuring programme, which was and still is
imperative in order to lead the economy to recovery,
could only be sustained through recourse to massive
external debt even if temporary relief could be obtained
from time to time by way of rescheduling agreements with
creditors. Rescheduling is itself at a cost. Besides,
it merely postpones and increases the debt.
Nevertheless, the Party and its Government decided to go
ahead with the measures in the hope that the country's
economic performance would improve and the drastic fall
in the people's standard of living would be arrested.
We have observed, with growing alarm, a situation where
escalating unemployment is becoming a permanent feature
of our economy. Galloping inflation has set in which has
pushed the prices of basic essential commodities beyond
the reach of our people, especially the low income groups
who are in the majority. Cases of malnutrition are on
the increase every day.
There has been a sharp rise in the mortality rate,
especially among the infant population, because hospitals
cannot afford to import the essential drugs and other
requisites necessary to support life. We are witnessing
a situation where our social fabric is slowly
disintegrating, thereby sowing seeds of unrest and
undermining the peace and unity of the nation. This
situation cannot and will not be allowed to continue. It
is patently clear that far from improving our condition,
we are not succeeding, hence the need for a fresh look."
It should, however, be pointed out that although the break
with the Fund led to the reversal of many of the measures
undertaken under the country's Fund-supported-austerity programme,
the reform measures contained in the ERP that replaced it retained
a number of features of the older programme.
The most recent efforts by the Government to tighten the belt
further in conformity with conditionalities proposed by the Fund
and Bank led to social unrest and an attempted coup d'etat in June,
Lessons from the Application of SAP in Africa
One thing that is very clear is that the existence of macro-
economic imbalance in the economy is a necessary condition for the
promotion of agricultural growth and development. Whenever macro-
economic disequilibria occurs in an economy, it makes logical
economic sense to embark on economic adjustment processes to
restore the economy to equilibrium. In this regard appropriate
macro-economic policies are needed to restore the economy to a
sustained and sustainable state of macro-economic equilibrium.
However, for the structural adjustment process to be beneficial to
any African economy, stabilization and adjustment processes must be
designed in a generalized framework of structural economic
transformation. The Structural characteristics identifiable with
the pattern of production, consumption, and exchange of African
economies constitute the most fundamental causes of their
underdevelopment and retrogression (ECA). Every African economy,
therefore, needs to be transformed rather than simply stabilized
and adjusted if the on-going crises are to be alleviated. The
crucial macro-economic and human questions of direct importance to
the agricultural sector have been posed by Green (p. 35) as
follows: "How can the trend rate of food production be raised?"
"How can dependable, rising levels of inputs into domestic
manufacturing be achieved?" "How can earned input capacity (the
counterpart and basic purpose of exports) be sustained?" "How can
increases in net farm household incomes be best obtained?" "How
can malnutrition be reduced?" "How can these goals be attained in
a sustainable way which neither pauperizes the rest of society,
thereby rending the social fabric and sowing the seeds of its own
destruction, nor destroys the ecological context of its own
A number of lessons can be learned from past experiences in
the implementation of SAPs in Africa that would be useful in
ensuring that the questions raised above are successfully addressed
in future efforts aimed at establishing and maintaining macro-
economic equilibria and stability in African economies. The key
macro-economic policy areas in orthodox SAPs for achieving the
objectives of agricultural development in African countries have
traditionally included exchange rate polices, pricing policies,
credit policies, fiscal policies, and institutional policies. Some
useful lessons concerning the implementation of these policies are
discussed briefly in the rest of this section.
Exchange Rate Policy.--One of the most important instruments of
Fund and Bank supported SAP's is the real exchange rate. Policies
are generally designed to lower the real exchange rate by
attempting to reduce the prices of non-traded (domestic) goods
relative to the prices of traded goods (Johnson). The reason is
balance of payments deficits in most African countries have
traditionally been associated with over-valued exchange rates.
In theory and under the right conditions, devaluation can
strengthen the balance of payments. To the extent that the
agricultural sector is a principal producer of tradeable goods,
devaluation can help change the structure of prices in favour of
improved production incentives for farmers. The so called "Dutch"
disease provides us with an additional example of the influence of
the exchange rate on the agricultural sector. The "Dutch" disease
is said to occur when a dominant booming export sector lures the
government into setting and maintaining an exchange rate at a level
much higher than would otherwise be the case. The net result is a
reduction in the international competitiveness of other export
products as well as products competing with imports in the local
market. When the dominant sector finally crumbles, the rest of the
economy crashes with it. Zambia provides a good example of this.
The fact is that both the balance of payments and the
agricultural sector are capable of benefiting from an exchange rate
policy that avoids large over-valuation of the local currency. The
impact of an active exchange rate policy under African conditions
will depend on whether the increases in local currency made
possible by devaluations are passed on to the farmers. Experience
would, however, suggest that while devaluation is likely to raise
the volume of agricultural exports, its effect on non-tradable
agricultural products is, at best, doubtful. Even in the case of
export products, volatile commodity markets, international
competition, low demand growth due in part to low price
elasticities in developed countries can lead to real difficulties
in predicting the effects of devaluation.
Other economic conditions peculiar to African situations also
prevent the anticipated benefits from an active exchange rate
policy from being achieved. In Malawi, for example, the
expenditure switching effects of currency devaluations have been
minimized by the fact that production in both industry and
agriculture has been import-dependent. The marketing structure was
also so imperfect that any gains, except in the case of tea, sugar
and a few non-traditional exports, did not trickle down to the
producer. Industry too was monopolistic and produced mainly non-
luxury goods. It is therefore apparent that these are hardly
conditions under which the supply side effects arising from an
exchange rate action would be maximized.
Under such conditions, a generalized currency devaluation
could lead to socially insupportable increases in the prices of
critical goods and services, increases in the domestic cost of
imported inputs which will undermine capacity utilization, the
unleashing of general inflation, the diversion of scarce foreign
exchange to speculative activities resulting in increased capital
flight, worsening income distribution patterns, and the undermining
of growth resulting in the structural entrenchment of traditional
exports through price incentives for such commodities or
"tradeables" (ECA). The liberalization of imports could also lead
to greater and more entrenched external dependence and to more
binding foreign exchange constraints. If so, a vicious circle
could be created with increased balance of payments deficits
preventing agricultural growth, which in turn further weakens the
balance of payments position of the country.
The lesson to be learned from the above analysis is that the
most effective exchange rate action is likely to be one that is
supportive and not in itself the major tool of adjustment.
Consequently, such action must be accompanied by corrective
measures to remove the bottlenecks which would prevent foreign
exchange action from having its maximum beneficial impact on the
economy in general and the agricultural sector in particular.
Furthermore, the Zambia experience would suggest that there is need
for a policy managed flexibility rather than a single large
devaluation which is currently popular but likely to be less
effective and more problematic.
Pricing Policy.--Inappropriate pricing of agricultural products has
traditionally been considered by orthodox SAP's as one of the
important domestic policy deficiencies responsible for the economic
crisis facing Africa. Hence, the need for pricing policy reforms.
It is argued that agricultural prices have been deliberately held
down in the past by African governments so as to provide cheap food
for their urban dwellers who are more politically vocal and active.
The prices of the principal export crops are also said to have been
deliberately depressed by state intervention by way of export
duties and compulsory procurement at low set prices which have
resulted in reduced incentives for farmers.
The conclusion, therefore, has been that state administered
real prices for the agricultural sector have been kept lower than
the equilibrium level under free-market conditions and that the way
to significantly increase the value added in the agricultural
sector would be to allow all prices to be freely determined in the
market. There are several implications for this reform measure for
"getting prices right" through free markets. First, available
estimates on supply response in Sub-Saharan African agriculture
suggest that the deviation between administered prices and free
market prices accounts for only 10 percent of agricultural output
growth (Green). Second, farmers respond to changes in relative
prices and any attempt to increase the output of agricultural
products by raising all agricultural prices are unlikely to succeed
in soliciting aggregative increases in marketed-supply. Thirdly,
although African farmers are known to be responsive to expected
prices, aggregate agricultural output price elasticities are
usually quite low. Finally, in most African countries, farmers are
known to market commodities which they produce outside of
administered price channels--especially in situations where
administered prices show significant deviation from market clearing
However, regardless of their price-elasticities African
farmers are unlikely to raise output much if other factors which
affect their productivity are ignored. Problems needing attention
include inadequate supplies of inputs; poor rural roads and other
infrastructures; ineffective rural institutions such as extension,
applied research and credit; and lack of incentives goods in rural
The experiences of African countries with SAP discussed above
clearly show that price adjustments alone will not lead to a higher
equilibrium levels of output. On the contrary excessive dependence
on market forces for getting the prices "right" in structurally
distorted and imperfect market situations is likely to lead to a
worsening of the inflation situation through sharp rises in
production costs and mark-ups, cause deviation from desirable
production and consumption patterns and priorities, and derail the
entire adjustment process. Furthermore, simple-minded price reform
measures are likely to do very little to help the majority of
small-scale and needy farmers since almost all the benefits from
higher prices depend or marketed and not total output. Price-
policy instruments when used should, therefore, be deliberately
designed and administered to ensure inclusion of commodities sold
by small-scale farmers.
Institutional Policies.--Several forms of institutional
arrangements in support of the agricultural sector are in operation
in African countries. Some of these institutions are run by the
government, others by the private sector, and the rest by quasi-
private organizations such as cooperatives. The main objectives
are to make institutions more responsive to market forces, more
accountable, and more cost effective. The main policies are
directed toward reforming public procurement and marketing bodies
and improving public and private enterprise services.
Policy instruments used include measures to enhance
privatization within agriculture, increase farmers' access to
agricultural credit including foreign funds to support trade by
farmers, and revitalize other institutional services such as the
provision of extension services, the distribution and delivery of
agricultural inputs, and the provision of storage and milling
The lesson to be learned from past experiences with
privatization in Africa is that attempts to apply it in a
doctrinaire manner is likely to undermine growth and the
transformation of the economy and jeopardize social welfare and
human conditions. It is insufficient to simply assume that private
enterprise competing to maximize profits will automatically lead to
optimal resource allocation for the country. Most private
enterprises operating under the structurally distorted and
imperfect market situations in Africa have ignored local and
regional development needs by investing in the export of raw
materials or the assembly of a limited array of capital-intensive
manufactures both of which aggravate external dependence and
undermine employment of local resources (Seidman, 1988).
It is for these reasons that the private sector in African
economies has traditionally been viewed as representing unpopular
and exploitative minority interests and many governments have
tended to avoid the political and economic implications of policy
changes which favour such interests. Experience suggest that there
will continue to be areas of private-sector and government
successes and failures in Africa and that some of the most
successful institutional services have been provided by governments
who knew in which areas to efficiently intervene. There are also
examples of where inadequate institutional support services for
agriculture have resulted from circumstances of excessive and
unwise governmental intervention.
There is no doubt that for structural transformation of the
economy to take place, the creative potential of society must be
mobilized to employ their skills in the use of available resources.
The role played by effective community action in the liberation
struggles in Zimbabwe are well known and provide useful insights as
to how the people's private and semi-private efforts can be
harnessed in service to themselves and to their countries (Seidman,
Fiscal Policies.--The main objective of fiscal reform measures in
SAPs in Africa is to attain stability in the fiscal accounts of the
governments concerned. The usual policy instruments used include
expenditure cuts and a rationalization of government investment
with a view to promoting private investment. In the agricultural
sector, the policies have usually involved the removal of
production and food subsidies and government investments used to
increase the share of agriculture in GDP.
The effect of these policy reform measures on the agricultural
sector have depended on how the reduction in government
expenditures were carried out and the balance that emerged among
fixed capital, working capital, and recurrent spending in the
agricultural sector. In many African situations, the needed
government fixed capital formation in agriculture is usually in the
construction of rural infrastructures and the provision of services
such as marketing, storage and processing rather than in explicit
direct investments in agriculture.
The budgetary cuts involved in most of the SAPs in Africa have
usually been drastic especially with respect to expenditures and
subsidies on social services and essential goods. These cuts have,
therefore, often undermined the human conditions, enabling
environment, and future potential for development of the sector.
For example, expenditures on health, education and rural amenities
are important requirements for sustainable increases in
agricultural productivity, yet these are the first areas that have
suffered from across-the-board cuts in expenditures called for by
fiscal reform measures in most SAPs.
Some fiscal reform measures have also limited the
effectiveness of other agricultural policies contained in the SAP
policy package. In Malawi, for example, the removal of subsidies
on fertilizer resulted in increasing prices of this critical input
in the face of sticky prices for crops needing fertilizer. Higher
prices for fertilizer at a time when major productivity gains,
especially for maize, were not being achieved discouraged farmers
from increasing production.
Budgetary reductions called for in fiscal reform measures
should always endeavor to strike the right balance among public
expenditures on directly productive agricultural activities,
expenditures on social services that enhance the human capital of
rural people, and public transfers which are vital to the well-
being of rural people such as food subsidies. Green has suggested
that adjustments in agricultural investments in previous SAPs were
poorly balanced. As a consequence, non-wage recurrent expenditures
(statistics, extension, research) and working capital (credit,
input supplies, etc.) were relatively under funded compared to
fixed capital formation in the agricultural sector.
Toward an Alternative Strategy
Killick (1985) has indicated that macro-economic disequilibria
usually originate from: the impact of international forces, such as
a non-temporary worsening in terms of trade; other "exogenous
shocks" of more domestic origin, such as droughts resulting in
harvest failures; fundamental structural weaknesses in the domestic
economy, which may result in a chromic tendency for the demand for
imports to grow more rapidly than the capacity to earn foreign
exchange; and policy mistakes such as the neglect of exports or the
excessive expansion of domestic demand.
Economic theory suggests that economic stabilization and
adjustment are necessary processes particularly in agriculture when
such disequilibria occur. However, as seen in the preceding
sections stabilization is meaningless without adjustment and
adjustment, in turn, is likely to be ineffective in the African
context without economic transformation. There is now enough
evidence to suggest that orthodox stabilization adjustment
programmes in Africa have not been successful in attaining recovery
from the economic crisis confronting the continent because they
have failed to bring about the needed socio-economic
SAPs have essentially been ill-adapted to the African
situation which is characterized by weak production structures and
imperfect markets. Most SAPs have concentrated on achieving
internal and external financial balances at the expense of basic
structural factors that are important for both economic growth and
socio-economic transformation and have benignly ignored or
marginalized the important macro-economic linkages between the
various productive sectors. For example, in the income generating
process, SAPs have traditionally ignored the important forces of
domestic demand and have focused on the production of primary
export commodities. Furthermore, conventional stabilization and
adjustment programmes have ignored aspects of income distribution
thereby marginalising the impact of the institutions embedded in
the different socio-economic groups.
Finally, by focusing mainly on internal and external balances
and changes in relative prices, the orthodox programmes leave the
important aspects of the critical needs and services, including
productive employment, on the periphery of the process of
adjustment (ECA). Other criticisms of the model of conventional
stabilization and adjustment programmes with particular reference
to the agricultural sector were presented by Green (p. 36) as
1) The global economic system in which the model would
operate best is structured to benefit the rich, the
financially strong, the creditors, and the producers of
complex goods and service and to damage the poor, the
financially weak, the debtors and the producers of
2) External imbalance is normally a consequence of internal
imbalance and/or exogenous shocks and, as such, can be a
misleading starting point for analysis as opposed to the
problem which must be solved.
3) Although, the macro-economic significance of agriculture
in Africa today and the impact of macro-economic policy
and performance on agriculture are indisputable, the
model attempts to move primarily from macro-economic to
sectoral to micro, and to concentrate on monetary
indicators and tools without an equally strong micro to
sectoral to macro aggregative build-up focusing on real
magnitudes, variables, and policy instruments. This
approach is open to very grave doubts.
4) The emphasis on performance by the model tends to
downgrade other targets and the tools/resources devoted
to attaining progress towards them.
The Economic Commission for Africa believes that for the
desired economic transformation to take place, there is a need to
identify the principal positive and negative factors impinging on
development, the human and material resources whose constructive
interactions provide the dynamism for development, and the network
of institutions that should be fashioned to provide a suitable
environment for the forces of change and development. Furthermore,
the possible interactions among the different elements during the
processes of adjustment with transformation would need to be
assessed so that appropriate strategies and policies can be
formulated and implemented. An alternative framework of adjustment
with transformation must be more human-centered, give a more
prominent role to internal productive forces, and involve a
resource use pattern that can transform an economy of primary
exchange to one of production. The alternative framework must also
effectively involve all socio-economic and institutional groups so
that the adjustment and transformation processes can lead to a more
equitable income distribution. Finally, the alternative framework
must meet the critical needs of the population by ensuring the
production of essential commodities and services, the production of
essential factor inputs, and the maintenance of increased
For the South African Sub-Region in general and a post-
independent Namibia in particular, such a framework must also
result in an investment portfolio that does not foster a drain of
resources and investible surpluses abroad. Such drains leave the
Sub-Region vulnerable to world conditions outside the Sub-Region's
influence. Rather, it should result in a situation whereby local
resources are used to create an expanding array of goods by both
agricultural and industrial workers and in the process gradually
raise their standard of living (Seidman, 1988).
Following the example by Green an attempt is made below to
sketch an alternative framework of adjustment with transformation
that roughly parallels the Fund programme areas analyzed above.
The policy measures presented are grouped into those applicable in
the short, (12 months), medium (12 to 36 months), and long term
(over 36 months). Because policy measures often do not manifest
themselves clearly before 36 months, the longer term measures are
of special importance in guarding against the more debilitating
longer term misallocation of resources which are bound to arise
when policy measures are used to force agricultural results in the
short and medium term.
Exchange Rate Policy
Short-Term.--If exchange rate policy reform measures become
inevitable, put into effect a system of de facto multiple exchange
rates in a rationalized manner for purposes of resource transfers,
resource mobilization, reversing of capital fight, and ensuring
availability of essential imports.
Medium-Term.--When the system begins to pay-off in terms of more
efficient resource transfers, an increased resource mobilization,
and a reversal of capital flight, the availability of essential
imports, and increased export volume, gradually move towards a
unitary exchange rate determined by the prevailing economic
realities of the country.
Long-Term.--Complete move to a viable unitary rate of exchange and
maintain the viability of this rate by installing an effective
crawling peg or other such system appropriate to the requirements
of the economy.
Short-Term.--Remove illogical barriers to the production of food
for both local consumption and export, and install an effective
system of guaranteed minimum prices and strategic food reserves for
the principal food and agricultural products of the country.
Medium-Term.--Continue with short-term policies. Initiate
differential export subsidies; remove trade barriers; encourage
trade among African countries; provide incentives for the export of
processed agricultural products and carefully selected food crops;
and initiate bilateral and multilateral agreements on export and
Long-Term.--Complete medium term measures, and encourage
consumption of locally produced food items through educational
Short-Term.--Strengthen agricultural research focused on increasing
productivity; restore and strengthen the national extension system
for the diffusion and application of agricultural research results
and the system for input delivery; create an adequately funded
"supervised food production credit systems" in rural areas with
access to farmers with limited collateral; assure adequate
agricultural credit allocations for procurement, marketing,
processing, and manufacturing; restore and improve existing rural
roads, transport, and storage systems; restore the provision of
basic rural services involving health, education, and clean water
supply and plan a strategy for universal coverage; and institute
emergency cost control measures for government parastatals through
effective accounting and accountability structures.
Medium-Term.--Complete short-term policies; create and strengthen
rural financial institutions; restructure agricultural credit with
special reference to women and to poor farmers by creating a
special fund for loans at subsidized rates for these groups of
agricultural operators; and remove subventions to parastatals other
than those providing social services to rural areas.
Long-Term.--Institute land reforms for better access and
entitlement to land for productive use; enhance the role of women
as agents of change and the modernization of the food production
sector; and encourage greater participation in decision making and
implementation of agricultural projects.
Short-Term.--Devote at least 20-25 percent of total public
investment to the agricultural sector; allocate an increasing share
of foreign exchange for imports of vital inputs for agriculture;
expand agricultural employment and promote increased linkages
between agriculture and industry; restore working capital and
recurrent expenditures for rebuilding a statistical, analytical,
planning, and monitoring capacity; allocate credit using guidelines
that would favor the food sub-sector and agro-industry; use
selective nominal interest rates to encourage productive
activities, discourage speculation, and result in positive weighted
real interest rates for savings; switch expenditures (without
necessarily increasing total government spending) to raise outlays
on the social sector to 30 percent of total government outlays with
emphasis on education, health and the integration of women in the
development process that are likely to increase productivity, and
thereafter, maintain a growth rate in pubic outlays on these
sectors in excess of the population growth rate; and enlarge the
tax base, improving the efficiency and fairness of the tax system
and improving the probity of the tax collection machinery.
Medium-Term.--Complete short-term policies; reduce government
expenditures on non-productive activities to the extent possible.
Long-Term.--Build on policies of medium-term.
The analysis in the preceding sections suggest that
stabilization is meaningless without adjustment and that
adjustment, in turn, is likely to be ineffective in the African
context without economic transformation. There is now enough
evidence to suggest that orthodox stabilization and adjustment
programmes in Africa have not been successful in attaining recovery
from the economic crisis confronting the Africa because they have
failed to bring about the needed socio-economic transformation.
Most SAPs in Africa have been ill-adapted to the African
situation which is characterized by weak production structures and
imperfect markets. These orthodox SAPs have concentrated on
achieving internal and external financial balances at the expense
of basic structural factors that are important for both economic
growth and socio-economic transformation and have benignly ignored
or marginalized the important macro-economic linkages between
productive sectors. In the income generating process, programmers
have traditionally ignored the important forces of domestic demand
and focused mainly on the production of primary export commodities.
Furthermore, the model of conventional stabilization and adjustment
programmes has ignored aspects of income distribution and the
institutions of the different socio-economic groups. Finally, by
focusing mainly on the internal and external balances and changes
in relative prices, the orthodox programmes leave the important
aspects of the critical needs and services, including productive
employment, on the periphery of the processes of adjustment (ECA).
For economic transformation to take place in African
countries, there is need to identify the principal positive and
negative factors impinging on development, the human and material
resources whose constructive interactions provide the dynamism for
development, and the network of institutions that should be
fashioned to provide a suitable environment for the forces of
change and development. A number of strategic development choices
for the agricultural sector will have to be made to articulate the
process of adjustment with transformation. These choices include
an open- versus closed-economy approach to development; market
incentives as an allocative mechanism versus planning and controls;
relative roles of the state and the private sectors; savings and
investments and the extent to which the rural economy is to be used
as a source of reinvestable surplus to develop the remainder of the
economy; and whether to place priority on economic growth or equity
objectives (Killick, 1985).
No matter the strategy, the emphasis should be on creating the
needed macro-economic linkages between the agricultural and other
productive sectors of the economy. All productive sectors of the
economy must share in indigenous resource use and contribute to
development. The role of the agricultural sector is to grow food
and raw materials for urban centres and industries; produce exports
to earn the foreign exchange needed to purchase essential machinery
and equipment; and, as productivity increases, release labour and
capital for other sectors. Industry must manufacture consumer
necessities designed to help raise rural and urban living
standards; produce tools and machines which embody technologies
appropriate for increasing productivity in the economy; process
agricultural and mineral output to facilitate domestic use and
increase foreign exchange earnings; and absorb labour released from
agriculture (Seidman, 1989).
In making the macro-economic choices required for
stabilization, adjustment, and transformation programmes, an
important consideration is the development of a consensus and the
political commitment to support the required macro-economic
management. Finally, African economies are characterized by
distortions, rigidities, limited markets and an imperfect
understanding of these markets; and efforts to transform these
economies will take time and, must of necessity, be gradual and
Amin, S. "Underdevelopment and Dependence in Black Africa;
Origins and Contemporary Forms." D.L. Cohen and J. Daniel,
eds. Political Economy of Africa. London: Longman, 1981, pp.
Dumont, R. False Start in Africa. New York: Praeger Press, 1969.
Economic Commission for Africa (ECA). African Alternative
Framework to Structural Adjustment Programmes for Socio-
Economic Recovery and Transformation. Addis Ababa, Ethiopia,
Froebel, F., J. Heinrichs, O. Kreye, and 0. Sunkell. "The
Internationalization of Capital and Labour." African Rev.,
Green, R.H. "Articulating Stabilization Programmes and Structural
Adjustment." S. Commander, ed. Structural Adjustment and
Agriculture: Theory and Practice in Africa and Latin America.
Portsmouth, New Hampshire: Heinemann 1989, pp. 35-54.
Johnson, O.E.G. "The Agricultural Sector in IMF Stand-By
Arrangements." S. Commander ed., Structural Adjustment and
Agricultural: Theory and Practice in Africa and Latin America.
Portsmouth, New Hampshire: Heinemann, 1989, pp. 19-34.
Killick, T. "Reflections on the IMF/World Bank Relationship".
K.J. Havenevik, ed. The IMF and The World Bank in Africa.
Uppsala: The Scandinavian Institute of African Studies, 1987,
S "Economic Environment and Agricultural Development:
The Importance of Macro-Economic Policy." Food Policy.
"The IMF's Role in Developing Countries." Finance and
Lyakura, W. A Case Study of SAP in Tanzania. Report prepared for
ECA, Addis Ababa, Ethiopia, 1989.
Mapondo, H. A Case Study of SAP in Malawi. Report prepared for
ECA, Addis Ababa, Ethiopia, 1989.
Ravenhill, J. "Adjustment with Growth: A Fragile Consensus." J.
Modern African Stud. 26(1988):179-210.
Seidman, A. "Towards Ending IMF-ISM in Southern Africa: An
Alternative Development Strategy." J. Modern African Stud.
S Agricultural Transformation Reconsidered: The
Southern African Experience." Trenton, New Jersey: Africa
World Press, 1988.
Seshamani, V. "The Human Crisis in Africa: The Experience of
Zambia." Paper presented at the International Conference on
the Human Dimension of Africa's Economic Recovery and
Development, Khartoum, Sudan, March 5-8, 1988.
Stryker, R.E. "Development Strategies in Contemporary Africa."
P.O. Meara and P. Martin, eds. Introduction to Africa.
Bloomington: Indiana University Press, 1977, pp. 17-29.
Wallerstein, I. "The Three Stages of African Involvement in the
World Economy." P. Gutkind and I. Wallerstein, eds. Political
Economy of Contemporary Africa. Beverly Hills: Sage
Publications, 1985, pp. 30-57.
World Bank (The). Accelerated Development in Sub-Saharan Africa.
Washington, D.C.: The World Bank, 1981.
Report on Adjustment Lending. Washington, D.C.:
The World Bank, 1988.
SESSION 2: RESEARCH POLICY
DETERMINANTS OF PRODUCTIVITY
IN THE AGRICULTURAL SECTOR WITH IMPLICATIONS
FOR RESEARCH POLICY AND ANALYSIS
Max R. Langham'
A central theme of this paper is the importance of human
capital. The most fundamental puzzle we are called upon to help
solve as economic-policy analysts with an interest in the
development process is, "How can we increase the value of peoples'
time?" The puzzle is a chicken-and-egg issue. From an economic
perspective, it is difficult to respect2 a person's time when it is
rather obvious that it is not very valuable. However, it is
necessary to respect human time and its potential if it is to be
nurtured through investments to foster economic development.
Things of importance have costs as well as benefits, and when
the economic inputs going into a system are growing faster than the
system's economic outputs, there is probable cause for concern
about what is happening. This is true because increases in
productivity are the major source of increases in the value of
human time and rates of growth in productivity provide feedback3 on
'The author is Professor of the Food and Resource Economics
Department, University of Florida. At the time the paper was
written, he was serving as Professor and Economic Adviser in the
Department of Agricultural Economics, University Center of Dschang,
and a member of the Agricultural Education Project which is jointly
sponsored by the United States Agency for International Development
and the Government of Cameroon and jointly conducted by the
University of Florida, Florida A&M University, and the University
Center of Dschang. This paper builds on a lecture given at the
University Center of Dschang, January 22, 1991. Without implicating
them, the author expresses appreciation to Drs. Joseph Ayissi
Mbala, William J. French, Francois Kamajou, and Peter A. Hartmann
for reading and commenting on an earlier draft of this paper.
2From the amount of time people are kept waiting in much of
Sub-Saharan Africa, it is rather obvious that the time of people is
not highly valued--at least in economic terms. I have even been
told on more than one occasion and much to my chagrin that the time
of farmers should not be valued when they are required to wait.
But, people are resourceful and one observes that some develop
mechanisms to insure that their waiting time is not completely
3Reliable feedback is not a free good and always important to
check performance. It is for this reason that economists have great
faith in an open exchange of goods and services as a way of getting
how a system is doing in this regard.
In this paper we begin with the definition of the terms
production and productivity, then look at the benefits and cost of
productivity and why it is important in the development process,
review some research on factors that cause changes in productivity,
and then discuss some implications for agricultural policy analysis
in Cameroon and the West African region. Major implications are for
By production, we will mean the output of goods and services
coming from the productive processes of a system. Most generally,
production is measured in monetary terms so that unlike goods and
services can be added together. Alternatively, production can be
measured with index numbers. Any measure used is imperfect and
always difficult to obtain. But, such measures when computed in the
same way for the same system can provide a useful indicator of what
is going on in the economy of the system. It is for this reason,
that countries spend a lot of money tracking the components of
total production. The indicators which result are most reliable in
tracking the performance of a given system. They are less reliable
when making comparisons across systems.
The term productivity will be used in two ways. Total factor
productivity (TFP), also called multifactor productivity, is
defined as output or production per unit of the inputs used. If Y
is a measure of total production in the system and X is a measure
of the total inputs used, then TFP = Y/X and the rate of growth of
TFP is the rate of growth of Y minus the rate of growth in X (see
footnote 11). For an economy or the agricultural sector for
example, one can also use productivity in a partial sense. Partial
productivity is a measure of total output divided by a measure of
one input. The partial productivity of labor is Y/L, where L is a
measure of total labor use.
There are problems with both concepts of productivity, but
both are useful in evaluating the performance of a system. The
major conceptual problem with TFP is that if you could accurately
measure all inputs and outputs and if our technology at a given
time were such that if you exactly doubled all the inputs you would
double the output, i.e., homogeneous of degree 1 as would seem like
reliable feedback in matters of economics. And, scholars have long
recognized exchange in an open forum such as this symposium as the
best way to get reliable feedback on ideas.
a reasonable assumption, TFP would always equal one. What makes TFP
useful is that we cannot measure everything that leads to increased
or decreased production so there is an unexplained residual which
represents in part the mystery of the system. It is because of this
problem that some scholars prefer the term multifactor
The major conceptual difficulties with partial productivity
are that it gives too much credit to the input in the denominator
and one can never know whether changes in a partial productivity
measure are attributable to changes in the factor in the
denminator. However, measures of partial productivity are widely
used. For examples, in agriculture we often speak of output per
farmer or per hectare, and at the university, we often use a
student to faculty ratio as a measure of faculty productivity.
Baumol has some clarifying thoughts on this measure of
Kendricks has described the importance of productivity and
there have been several efforts to measure growth rates by sectors
of an economy.4 There has also been considerable research on the
determinants of productivity by scientists and others concerned
with what can be done to increase economic outputs relative to
inputs in an economic system. In the 1970s and 1980s, there has
been a considerable slowdown in productivity in many countries--
especially in the more developed ones. There has also been
considerable research on the causes of this decline.5
The Importance of Increasing Productivity
The primary reason why productivity increases are so important
to economic advancement is that they conserve resources. These
savings can be in human, capital, and/or natural resources. Getting
more output per unit of input is just another way of saying that
costs per unit of output are lower. Lower marginal costs lead to
increased supplies and lower prices. A desirable consequence of
lower prices is that consumers can purchase more goods and services
with a given level of money income. More efficient use of resources
also permit benefits on the production side. In agriculture, a rule
of thumb is that consumers capture about 3/4 of the benefits of
increased productivity and producers 1/4. However, regardless of
the sector, productivity increases have been the chief source of
increased real per capital incomes of people in the economic
4The work by Jorgenson, Gallop, and Fraumeni on the United
States economy represents one of the most comprehensive empirical
studies on productivity that has been done to date.
5 For examples, see the papers by Fischer, Griliches,
Jorgenson, Olson, and Boskin given at the symposium entitled "The
Slowdown in Productivity Growth."
There are two important side effects of this conservation of
resources brought about by productivity increases. First, inflation
rates of prices are moderated. Secondly, the economy or sector of
the economy which experiences the productivity gain is better able
to compete. As a consequence, particularly of this second factor,
different rates of productivity growth among sectors of an economy
will lead to changes in the relative importance of sectorial
contributions to a country's output. Also, international
differences in productivity growth rates lead to differences in the
competitive position of countries, to country differences in real
per capital incomes of people, and to changes in the relative
purchasing power of currencies.
Costs of Productivity Increases
Productivity increases are not without costs. Increased
productivity comes from such things as improvements in technology
and in the quality and organization of resources used in
production. As a consequence, they require intangible investments
to improve the economic performance of the human and non-human
factors of production. The human resources are of particular
importance and require investments in education and training,
health, safety, and mobility. Also, research and efforts to
discover new knowledge are in large part investments in human
capital simply because knowledge before it can be helpful to
society must originate from and be embedded in a person or persons.
Another significant cost of increases in productivity is the
cost of adjustment of resources, especially human resources, made
relative less competitive by the process of change. In agriculture,
increases in productivity have made it difficult for those farmers
to survive who cannot, for some reason, adopt the more productive
processes. What often happens in such cases is that the current
generation of farmers do continue farming even with a relative
decline in their level of living. However, their children seek
employment off the farm. As a consequence, increases in
productivity in agriculture will have much the same effect on farm
population as a decline in total factor productivity in the farm
relative to the non-farm sectors--a decline in the proportion of
the population on farms and an increase in the average age of
farmers. In the first instance, people are pushed off the farm by
an inability of their families to compete in agriculture. In the
second, they are pulled off by more attractive off-farm employment
Factors and Forces Causing Increases in Productivity
Technological progress accounts for a good proportion of
productivity growth. In a classic study, Robert Solow (1957)
estimated that about half of our productivity growth comes from
more productive technologies. Also, in a study of the U.S. economy
for the period 1929-69, Denison estimated that about 2/3 of the
growth in output per unit of input (TFP) came from a set of factors
made up predominantly of advancements in knowledge.6 Other factors
that are important are improvements in resource allocation (a
result of better management) and scale of economic activity.
In two studies with students at the University of Florida, we
found strong evidence that policies set by government are very
important to growth in TFP. In his Ph.D. study, Ahmed found that
during the period 1959-66, the Government of Indonesia was trying
to guide the economy with a strong hand, TFP in the agriculture
sector declined at an estimated rate of -1.99%. In Brazil, Castelar
found that the government's policy of favoring the South in its
agricultural research and development strategy led to considerably
higher rates of agricultural productivity growth in the South
relative to the Central and Northwest regions.
Neither of these studies was able to determine the precise
causes of differential growth rates in productivity. In Indonesia,
the causes were believed to be distortions due to restraints on
economic decisions as a result of central planning and top down
decisions. This model of decision making is prevalent in many
countries of Sub-Saharan Africa. In Brazil, the cause was believed
to be due to larger expenditures on agricultural research and
development infrastructure in the South. The decision to
concentrate effort in the highest payoff region may have been a
good strategy in terms of aggregate country payoff. However, it was
not without costs associated with increased interregional tensions.
A third study by Habasch was with research on the hypothesis
that diversification is inversely related to total factor
productivity. The hypothesis initially grew out of an effort to
explain different growth rates among the states of the U.S. in the
total factor productivities of their agricultural sectors. The
hypothesis is consistent with some old truths in economics and
offers another explanatory element to the determinants of
productivity growth. Data were for 42 state7 for the years 1950-82.
The variables in the model used to explain variations in total
factor productivity (TFP) in agriculture, among states and over
time, were measures of diversification, research expenditures,
extension expenditures, average level of education of farmers, and
6 As reported by Kendricks (Table 7.1, p.73).
7Data were estimated by Evenson, Landou and Ballou and were not
available for Alaska, Connecticut, Hawaii, Maine, Massachusetts,
New Hampshire, Rhode Island, and Vermont.
the interaction between the research and diversification variables.
Dependent variable = logarithm of an index of TFP in state i
and year t,
lnDi, = logarithm of an entropy index of diversification for
state i and year t,
In(R,,i + R,.6)/2 = logarithm of a simple average of research
expenditures in state i lagged 1 and 6 years, respectively,
from year t,
lnExit = logarithm of extension expenditures for state i and
lnEdi, = logarithm of years of education of the average farmer
for state i and year t, and
lnDit*ln(Ri,tl+R,.16)/2 = interaction of the diversification and
research variables for state i and year t.
The results of the estimation are given in Table 1.
Fixed and random effects models were estimated to allow for
state effects not measured by the independent variables. The more
general random effects gave what were believed to be the best
estimates, and the Parks method was used to estimate the model.
This method allowed for state-specific variances and serially
All of the variables were measured in natural logarithms so
their estimated coefficients represent estimates of the percentage
change in TFP when the respective independent variables are
increased 1%. All the estimated regression coefficients have the
signs we expected and their t-values all suggest a high level of
statistical significance. The results indicate that a 1 % increase
in diversification, research, extension, education of farmers, or
the interaction of diversification and research will lead to a -
3.5, .21, .007, .35, and .20 % change in TFP, respectively. One can
see that a strategy of diversification may be ill advised without
increased investments in research. One should also note the sizable
impact of the education level of farmers on productivity. Extension
Table 1. Regression Results of Random Effects Model Corrected for
Variable Coefficient Standard t-Value
Intercept 0.4956 0.0054 90.22
InDi, -3.5471 0.0192 -184.35
In(R,,,1 + Ri,-6)/2 0.2065 0.0007 258.91
InExit 0.0067 2.6/100,000 229.69
InEdit 0.3463 0.0037 91.26
lnDit* In(R~,t1 + Rit6) /2 0.2032 0.0011 182.93
Source: Habasch, Table 6, p. 59.
expenditures show a very small but significant8 impact on
productivity. The basic education of farmers is very important to
The opposite of economic diversification is economic
specialization. Diversification is often heralded as a strategy to
get the agricultural sector moving and/or to lower risks. Seldom do
those who propose such a strategy look at the cost implications.
Although the research by Habasch uses U.S. data, the results are
consistent with two very old truths in economics. The first of the
old truths was put forth by Adam Smith in 1776 with his well-known
example of the pin factory which he used to argue the gains from
"owing to three different circumstances; first, to the
increase of dexterity in every particular workman; secondly,
to the saving of the time which is commonly lost in passing
from one species of work to another; and lastly, to the
invention of a great number of machines which facilitate and
abridge labour, and enable one man to do the work of many."
The second of these old truth comes from Ricardo and his well-
known "Law of Comparative Advantage." This law carries the idea
that countries or regions gain from specializing in those
81 hasten to point out that the reader should not be overly
impressed by the level of significance of the estimates. The data
set contained 1386 observations--a large number as economic data
sets go. As a consequence, the tests of significance largely just
demonstrate a shortcoming of the traditional statistical test of a
null hypothesis. With a large number of observations, such tests
are little more than an empirical verification of a well-known
truth that the probability of a continuous random variable taking
on a specific value is zero.
production activities in which they have a comparative advantage
and then trading with other countries or regions. The gains from
specializing and trading is a pillar of trade theory.
This new evidence on the cost side of the diversification
issue is of particular importance to the agricultural sectors of
countries of Sub-Saharan Africa. And, it has implications for
research policy and the nature of agricultural systems to be
encouraged through policies. Without adequate human and capital
resources to support research to solve the technical problems up
front, it is probably best not to attempt diversification. I will
return to this issue later in a Cameroonian context.
Investments in Human Capital
and Research on Agricultural Problems
In relation to our work on factors affecting productivity in
agriculture in Florida, we participated in the work of an
interregional research committee (IR-6). The work of this group is
involved with measuring returns to human-capital and other
investments in agricultural research. The work grew out of earlier
work at the University of Chicago.9 Some important findings which
were from studies in developing countries or which pertain to them
are as follows:
1. Average social rates of return to public-sector
agricultural research have been high and most estimates
depending on the commodity, the time, and the country range
between 30 and 50 %.
2. Evenson and Kislev estimate that developing countries
receive returns on applied agricultural research which average
nearly 47% --more than double the 21% estimated for developed
countries. However, developed countries earn estimated rates
of return of approximately 60% on basic research in comparison
to an estimated 36% for developing countries. These estimates
suggest that developing countries should be doing relatively
more adaptive-type applied research. Their estimates of
returns to outreach activities range from 29 to 60 percent
depending upon the commodity and country.
3. There are large spill-over effects with research. About
one-third of the producer benefits from science-oriented
(basic) research remain in the environmental region conducting
9T.W. Schultz and his students and Zvi Griliches played
dominant roles in initiating this work. Much of the earlier work
has been summarized in an article by Evenson et al. IR-6 has also
summarized a number of conclusions from its own and related
the research. The remaining two-thirds spills over to
producers in other areas. On the other hand, about one-half to
two-thirds of technology-oriented (applied) research is
captured by producers in the region where the research is
4. Since a major share of the total benefits of agricultural
research accrue to consumers (about three-fourths) in the form
of lower real food prices over time, metropolitan and areas
with the highest concentrations of population capture most of
5. Not only are consumers the major beneficiaries of
agricultural research but also the distribution of these
benefits favors the poorest consumers. In the U.S., White
estimated that the benefit-cost ratio to the lowest-income
group (under $10,000) of consumers was 11.6 and ranged
downward to 1.35 for the highest-income group (over
6. The effect of new technical knowledge in agriculture decays
or depreciates with time. Non-biological knowledge becomes
obsolete. New biological knowledge also depreciates in value
as natural predators adopt to the new environment created by
the knowledge. As a consequence, research just to maintain
productivity takes considerable investment. For example, it
has been estimated that 70 % of the wheat research in parts of
the U.S. was needed just to maintain current yields.
7. A case study by Ansoanuur in Florida suggest that rates of
economic returns on post-harvest (marketing) research are
comparable to those for production oriented research in
agriculture and that consumers capture about two-thirds of the
8. Applied production technology is quite site specific and
generally research effort is required to adapt it to a
9. Agricultural research has a lagged effect and neglect today
is felt in the future. Research by White and Havlicek suggest
that a strategy to postpone agricultural research expenditures
to a future date and then try to catch up is not advisable
'"This result is largely due to the facts that the income
elasticity of demand for food is inversely related to the level of
income and that the proportion of anyone's income which goes to
support agricultural research is a very small part of total income-
-even when agricultural research is largely supported from a
graduated tax which falls heaviest on the upper income classes.
from a cost perspective.
The above items were enumerated to give a broad picture of the
importance of our roles in the agricultural research establishment.
Our time does not permit detailed discussion of the various studies
and the methodologies used, but the general conclusions would not
change. Agricultural research and education has high payoff. Even
though we agriculturalist place much emphasis on helping farmers,
the major beneficiaries are people who consume food--all of us. The
poor spend a much higher proportion of their incomes on food than
do wealthier members of society and as a consequence the poor among
us benefit relatively more from our agricultural research efforts.
Finally, we should emphasize that the specific beneficiaries of
agricultural research are difficult to predict because of the
spillover effects of new knowledge. In a world where food markets
are highly interdependent, it behooves each of us to appreciate
solid agricultural research enterprise wherever it occurs and to
strongly endorse and support it in our home region.
Some Troubling Rates of Growth in Cameroon
The data on value added for a sector give some basis for
providing information on what is happening to production and, to a
lesser degree of accuracy, to productivity. However, measures of
value added in national accounting systems do not take into
consideration items which do not enter marketing channels. What
value added in agriculture in Cameroon does measure is the total
value of agricultural production sold minus the total value of
inputs purchased from other sectors of the economy, i.e., it is an
estimate of the total production marketed which is attributable to
the resources (mainly land and labor) endogenous to the
agricultural sector. As long as the proportion of agricultural
production consumed at home remains the same, there is no serious
error in using rates of growth in value added as a measure of
rates of growth in agricultural production attributable to
resources endogenous to agriculture.
The data used to estimate the rates of growth reported here
were from The World Bank sources given in the references.11
Continuous compounding was assumed and the results are given in
The estimates show a distinct drop in the growth rate in value
added in the agricultural sector in the 1980s. This decline coupled
with an increase in the population growth rate to 3.53 % has led to
a negative rate of growth of nearly 1% in per capital food
production. The World Bank's estimate of the average calories
available per person in 1986 was 2028, 88 % of the level needed to
adequately nourish the average citizens of this country, and the
lowest number of calories per person among the years The World Bank
has estimated this parameter12. These figures suggest that there is
increasing hunger in Cameroon, and it is always the poor that bear
the greatest burden in times of reduced food supplies.
An inverse relationship between levels of income and fertility
rates has been well established13. Although there is a difference
between fertility rates and population growth rates, they are
positively correlated, and an increase in the population growth
"If one compounds a variable, say Yt, continuously over time
at a rate r, then:
Yt = Yo*e*t, where Yo is the starting value of Y at time t = 0,
and means to multiply. Take the natural logarithm of Yt to
In Yt = In Yo + r*t, and r is the derivative of In Yt with
respect to t.
And, an estimate of r is provided by the estimated regression
coefficient of t from a simple regression of In Yt on t.
If Y is compounded annually, then:
Yt = Yo(l+r)t, and
In Yt = In Yo + t*ln(l+r).
An estimate of r is now provided by taking the antilog of the
estimated regression coefficient from the simple regression of
In Yt on t and subtracting 1.
At time t, TFP, = Yt/Xt and In TFPt = In Yt In X,, so the rate of
growth of TFP is the rate of growth of Y minus the rate of growth
'2The Word Bank's estimated calories per person during the
three best years for which I have data were 2159, 2130, and 2439 in
1970, 1980, and 1981, respectively.
3See for example Murdoch, pp. 15-92.
Table 2. Estimated rates of growth in value added in agriculture,
food production per capital, and population in Cameroon
for selected periods of years.a
Value Added Food
Years in Production Farmb Total
Agriculture per Capita
1970-1979 0.0574 N/A 0.0026 0.0217
(0.0079) (0.0002) (0.0002)
1980-1988 0.0315 -0.0098c 0.0090 0.0353
(0.0072) (0.0039) (0.0021) (0.0016)
1970-1988 N/A N/A 0.0062 0.0285
aCoefficients in parentheses are estimated standard errors of the
respective estimated regression coefficients. All estimates are
significantly different from zero at the .05 level or higher.
bData on the farm population were not available for 1971, 1972,
1973, 1974, 1982 and 1986.
'Data were available only for the period 1980-1987.
rate in Cameroon during the 1980s is consistent with what one would
expect to happen during a period of economic decline. However, the
increased growth rate in population exacerbates attempts to
increase productivity growth rates because of the investments
required to increase TFP.
There is a result from the neoclassical theory of economic
growth (Intriligator, pp. 339-405) which is based on the assumption
of a closed economy but which, nevertheless, helps to clarify this
matter. One can partition production per capital in an economy into
its uses which are consumption per person plus investment per
person. However, investments per person in the system have three
components--investments to cover depreciation of existing capital
per person, investments required to bring new population up to the
average capital level per person, and finally net new investments
per person. It is the net new investments per person that are the
source of improved economic well-being per person in the economy,
and the higher the population growth rate, the more difficult it is
to increase such investments.
Growth in the partial productivity of agricultural labor can
be estimated (see footnote 11) by subtracting the growth rate in
the rural population from the growth rate in value added in
agriculture. From Table 1 for the period 1970-79, this estimate is
(0.0574 0.0026) = 0.0548 or 5.48 % and (0.0315 0.0090) = 0.0225
or 2.25 % for 1980-88. This decline is evidence that the
agricultural sector in Cameroon has some real challenges if it is
to help improve the economic situation.
Most other Sub-Saharan counties are having similar or worse
experiences. The World Bank (1989, p.17) has estimated that gross
national income per capital in Sub-Saharan countries was about the
same in 1987 as in 1967--a period of over 20 years with little
progress. Projecting to the year 2020, The World Bank's most
favorable scenario (fertility rates declining by 50%, and annual
growth in food production doubling to 4 %), is required to avoid a
widening of the food gap (1989, p.73).
Boyce and Evenson (p. 8) estimated that in 1974 the countries
of North America and Oceania were investing 2.7% of the value of
their agricultural output in research in agriculture. In
comparison, investments in new knowledge in the countries of Africa
were estimated to be 1.4% of the value of their agricultural
production. In contrast, African countries were investing 2.2 % of
the value of agricultural output in extension in comparison with
0.6 % for North America and Oceania. The relative expenditures on
research and extension in Africa represents a premature emphasis on
extension. Schultz (1979) reported the same phenomenon throughout
Latin America. Measures of rates of return to investments in
extension are comparable to those for research but only when there
are worthwhile research results to extend.
The emphasis on extension before there is a research base to
support it suggests two things--a scarcity of well-trained people
capable of doing good research and a misconception that a country
can substitute extension for research. The phenomenon is due in no
small part to a strong emphasis on extension in development
assistance programs in the 1970s,14 and an emphasis on extension is
resurfacing again in development assistance programs. For example,
The World Bank is initiating a large program in Cameroon.
Development assistance programs are under pressure to show results,
but attempts to circumvent the need for solid research will fail.
Here in Cameroon, expenditures by IRA and IRZ in 1975 were
roughly 1/4 of 1 % of the value added by the agricultural sector of
Cameroon, and in 1985 these agencies were budgeted about 1 % of the
value added in agriculture.15 However, they actually received only
about 70 % of the budgeted amount (Pardey and Roseboom, p.108).
Cameroon is spending much too little on agricultural research. More
will be needed to obtain positive growth in agricultural
productivity. In terms of personnel, Cameroon had about 100
scientist in the mid 1970s with roughly half of them expatriates.
In 1985, there were 245 of which 60 were expatriates (Pardey and
Roseboom). Cameroon with its diverse environments and agricultural
systems is often offered as a model of Africa. Its over investments
14See Ruttan's statement on this point about development
assistance in Krueger et al., p. 168.
1Computed from data provided by Phil Pardey from the work by
Pardey and Roseboom.
in human capital in agricultural extension relative to research is
also fairly representative.
Some Interesting Puzzles
The agriculture of the world is fairly highly specialized and
has with time become more so. The following quote (the underlined
emphasis is added here) from the National Academy of Sciences (p.
1) will serve to emphasize this fact:
Throughout history man has used some 3000 plant species for
food; at least 150 of them have been commercially cultivated
to some extent. But over the centuries the tendency has been
to concentrate on fewer and fewer. Today, most of the people
in the world are fed by about 20 crops--cereals such as wheat,
rice, maize, millet, and sorghum; root crops such as potato,
sweet potato, and cassava; legumes such as peas, beans,
peanuts groundnutss), and soybeans; and sugar cane, sugar
beet, coconuts, and bananas. These plants are the main bulwark
between mankind and starvation. It is a very small bastion.
There are a relatively few commodities which have large
commercial markets. In choosing commodities for development to
provide opportunities for a sizeable number of producers, one has
to be very sensitive to the size of the market. For many minor
commodities, only a few producers are needed to satisfy the demand.
Such commodities are not good candidates for programs for public
promotion to aid ailing agricultural sectors.16
Man's historical experience in agriculture as indicated in the
above quote, Adam Smith's familiar lesson from the 18th century
with the example of the pin factory, and trade theory all call for
greater specialization. Yet diversification is nearly always the
'6Publicly-supported research to learn more about such crops
should in my opinion be encouraged with a portion of our research
funds. However, such research seems to be becoming increasingly
difficult to do as competition for publicly-supported research
funds shortens the planning horizon for expected payoff. The
competition for scarce funds also has a tendency of forcing
research administrators into a premature promotional mode which
results in rising expectations and fadism in the research
establishment. Too often, disillusionment in the results and
abandonment soon follow. I have often pondered whether the
developmental research to raise the soybean from obscurity to major
crop status, as was accomplished at the University of Illinois,
could happen in today's research environment. My suspicion is that
it would be much more difficult than it was in the 1920s and 1930s.
first remedy put forth as a cure when the agricultural sector is in
economic trouble. The puzzle is why?17
One of the old truths which T. W. Schultz called attention to
in the 1960s is that farmers are rational in their economic
decision making, that the transformation of traditional
agricultural systems requires investment in new methods, and that
for savings and investments to occur there must be opportunities
for farmers to make profitable investments and incentives for them
to save to do so. The puzzle is why do we ignore old truths?18
If one applies the Schultzian result to the diversification
issue, one would expect that traditional systems would have over
time exploited opportunities for diversification. Diverse natural
environments lead by necessity to the selection of crops and animal
enterprises that are accommodated by the environment. For example,
one does not grow millet in an area like the south of Cameroon.
Neither does one grow plantains in the north of Cameroon. However,
it is less clear whether traditional systems have evolved to
exploit opportunities for diversification created by price
movements in world markets. Our initial exploration into this issue
support the hypothesis that indeed they do.'9 If so, the evidence
adds to the robustness of the Schultzian hypothesis. It also
7One can say with little fear of being wrong that this call
for diversification is a universal phenomenon. In fact during a
period of agricultural stress in the 1980's, a "Center for
Alternative Crops" was developed at the University of Florida to
look for the magic of new crops. At the same time there was major
activity in the Caribbean to encourage diversification.
1A third puzzle which all policy analysts should ponder has
been clearly articulated by Krueger. Why do we as economic analysts
continue to look to government to correct problems of market
failure rather than to encourage governments to focus on problems
which involve the provision of badly needed social-overhead
I would argue that each of these puzzles has a common thread--
research to support policy analysis has become too politicized. The
scientific agricultural community has by and large taken the easy
path. Too much of our credibility has been preempted by the desire
to please rather than to question. A desire to help special
interests (including our own) capture greater rents from the
agricultural sector than to increase the productivity of human and
natural systems. In much of Sub-Saharan Africa, the agricultural
research establishment is in fact a part of the political
bureaucracy so the phenomenon is less difficult to understand than
say in the U.S. where we proudly wear the land-grant tradition as
though it protects and keeps us objective.
19See the appendix for a summary of our work to date on this
suggest that the potential for gains from greater diversification
may be even more costly to exploit.
Some Implications for Research Policy
For a country to thrive in a modern interdependent world, it
will need to do most what it does best. It will also need a strong
research and educational program to assure that it can compete with
state-of-the-arts technologies. Here at The University Center of
Dschang (UCD) we are charged with the tasks of assisting Cameroon
in investing in human capital through teaching, research, and
outreach. Our challenges are great. If our efforts as teachers and
students do not result in learning, if our research efforts do not
result in new and productive knowledge for the agricultural sector,
if our outreach efforts do not efficiently deliver what we have
learned to those who need it to increase their personal
productivity, we are wasting our time and scarce investments funds.
The training of young minds is the chief enterprise of a
university, but such training goes beyond the transfer of existing
information and must include the scientific processes by which we
obtain reliable knowledge. I will close with some remarks on a
strategy for this task which draw from ideas which we have put
In a review of the development of the national agricultural
research capacity of India with the objective of seeing what
lessons were applicable in this experience for Africa, Lele and
- that many of the preconditions for technological
change that existed in India in the 1950s are absent in Africa
in the 1980s. To begin with, the continent's agricultural
research problems are far more complicated than India's.
Africa's soils are more diverse, its climate more varied, its
pests and disease hazards more pronounced, its farming systems
more complex," (p 334).
In a recent article Eicher called for sharper focus in
research efforts in Africa when he wrote:
"During the colonial period, long-term, highly focused
research on a single crop such as cotton, groundnuts, cocoa,
oil palm, or maize, was successful in producing new technology
that was relevant to African conditions. But many NARS
(National Agricultural Research Systems) and donors have
ignored this experience and have spread their support for
research over a large number of commodities and promoted a
diffused research effort,"(p. 134).
The Agricultural surveys of Cameroon indicate that on average
there are 7 crops interplanted on tilled land in West Province. The
agricultural systems are indeed complex. From a research
perspective such complex farming systems--grown in an array of
environments which include different soils, slopes and elevations,
and access to input and product markets--are a scientific
nightmare. The number of variables involved are just too large for
experimental purposes. And, I would argue that on-farm trials of
complicated farming systems are a scientific charade and that
successes from such efforts will depend much on serendipity.
Our work at Florida suggest that the more diversified a system
the more costly are gains in productivity, and we believe the
causal factor for this result is that more diversified systems
spread research and other technical human-capital resources over
too many problems. The countries of Sub-Saharan Africa just do not
have the resources, whether they be in the form of trained
scientist or research and outreach support resources to handle such
a complex and difficult agenda. Indeed, it is doubtful if any
country of the world does. From a research policy perspective, a
sharper focus on the technical problems is needed. With production
environments which range from rain forests to deserts and from
coastal plains to mountains, the number of research problems which
will need attention will be very large if only one or two
commodities were chosen for each environment.
Permit one more Cameroonian example. Last year we developed
some good mission statements for UCD. However, we did not use much
restraint. In fact most of the statements read as though, we at UCD
were going to solve everyone's agricultural research and
educational needs. Mission statements by their very nature are
broadly written as a consensus of those involved. Such statements
are helpful in getting us to think collectively about an important
matter and perhaps to use in our public relations. However, from a
scientific perspective, such statements are not disciplined enough
in their selectivity to guide our work and we will be in deep
trouble and so will Cameroon's agriculture if we spread ourselves
In summary, my messages are simple. Increases in agricultural
productivity require investments in human capital. There are two
fundamental needs. A good basic education of the farmers is of
prime importance. Secondly, there must be scientist with a strong
capacity to solve technical problems and to develop new knowledge.
Such needs are costly and they represent long-term investments.2
We do not have to solve all the problems associated with the
production and distribution of the many agricultural products to
increase productivity. If we can help the countries of Sub-Saharan
Africa increase their market shares with a few important
commodities, we will survive and thrive and be of great service.
The commodity markets and the international markets for ideas will
grade our work. There are no quick fixes but there are great
opportunities to be of service in fulfilling an essential function.
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